Solana faces the risk of a plunge: The target price is $77

Solana (SOL) is currently in an accumulation phase, with price fluctuations ranging from $77 to $87 in recent weeks. However, recent market signals indicate that this cryptocurrency may face a significant correction. A bearish pattern has emerged, along with changes in investor behavior, potentially leading to a sharp decline with potential losses of up to 38% if prices break through key support levels.

Increasing Selling Pressure from Short-Term Investors

One of the main concerns is the LTH vs. STH NUPL indicator (Unrealized Profit/Loss of long-term and short-term holders). Since February, the unrealized profits of short-term holders (STHs) have been steadily increasing, showing they are realizing significant gains.

However, STHs tend to take profits quickly when in profit, which can create strong selling pressure on Solana’s price. Conversely, the unrealized profits of long-term holders (LTHs) show no corresponding increase, indicating instability within this group.

Solana holdings by holders | Source: GlassnodeIf LTHs also panic and start selling off, the downward pressure will become even more severe. The lack of support from LTHs increases the risk of a large-scale sell-off, putting SOL at risk of deeper declines.

Inflow of Funds to Exchanges: Warning Signs

Macroeconomic indicators are also signaling weakness for Solana. Specifically, the Exchange Net Position Change indicator shows increasing inflows of funds into exchanges, a clear sign of growing selling activity.

Solana’s net position change on exchanges | Source: GlassnodeOver the past four weeks, this indicator has consistently recorded rising selling pressure from investors, reinforcing bearish sentiment for SOL. As more investors sell off, downward pressure will continue to weigh on the cryptocurrency, increasing the likelihood of breaking key support levels.

Risk of Breakout from Bearish Flag Pattern

Currently, Solana is trading at $86, remaining within the range of $77 to $87. However, the formation of a bearish flag pattern on the technical chart indicates a risk of sharp decline if the price breaks below the $77 support level.

Solana price analysis | Source: TradingViewIf this support level is broken, Solana could see a decline of up to 38%, dropping to $57, $51, and even $45. For this scenario to occur, selling pressure must continue to increase, and the price must break through the critical support at $64.

Hope for Recovery: Conditions to Neutralize the Downtrend

Although a bearish outlook dominates, there is still a chance for Solana to escape the negative trend if investor sentiment shifts positively. If the price surpasses resistance levels at $88 and $96, the downtrend will be invalidated, opening the door for a strong recovery. In that case, SOL could rise to $100, marking the highest point of the month.

Conclusion

Solana stands at a critical crossroads, where both selling pressure and market sentiment play decisive roles. Currently, investors should closely monitor key support and resistance levels, as well as market signals, to make informed decisions. If selling pressure continues to grow, Solana may face a significant decline. Conversely, if market sentiment improves, this cryptocurrency still has the potential to recover and reach new price milestones.