Solana Enters Final Defense Before Box Range Collapse..."A Single Slip Could Lead to a 30% Drop"

▲ Solana (SOL)/AI-generated image

An analysis suggests that if Solana (SOL) fails to defend the $78.17 support level, it could drop to $58, placing it at a critical juncture that will determine the direction of its recent box-range movement.

According to crypto media outlet NewsBTC on May 31 (local time), Solana has traded sideways for the past month with no significant net price change, but entered a downtrend after forming a short-term peak around $97 in early May. The weekly price loss was reported as 4.09%, and Solana is also facing downward pressure amid a general bearish sentiment in the market.

Crypto analyst Ali Martinez analyzed on May 30 (local time) via X (formerly Twitter) that a horizontal channel has formed on Solana's daily chart. A horizontal channel is a structure where prices move between two flat parallel lines that act as support and resistance. Generally, a breakout above the upper resistance is interpreted as a bullish signal, while a break below the lower support is a bearish signal.

According to Martinez, Solana has remained within the current horizontal channel since early February, retesting it twice in March and April, forming a resistance level around $97.79. Conversely, the lower support level of the channel is located at $78.17, confirmed by price visits in February and April. He stated, “$78.17 is one of the most important support levels for Solana right now. If it holds above this zone, it could rebound to the mid-range of $87, but if it breaks, it could open the way to $58.”

NewsBTC reported that Solana has been pushed back from its upper resistance level in May and is now heading towards the $78.17 support level again. The current price is hovering around $83, and bullish forces must defend this common support level to maintain the box-range structure. If the retest of $78.17 is successful, Solana could aim to reclaim the horizontal channel's midpoint of $87.

Conversely, if it breaks below $78.17, the short-term downside risk extends to $58. Martinez analyzed that in this scenario, there is a potential loss of approximately 30% compared to the current market price. As of the time of writing, Solana was trading at $82.91, up 0.22% over 24 hours. Daily trading volume decreased by 33% to $2.22 billion, indicating a quiet market with reduced participation and transaction counts.

The US Solana spot ETF maintained weekly net inflows for four consecutive weeks, but the intensity of inflows has slowed. According to SoSoValue data, net inflows into the US Solana spot ETF peaked at $58.12 million in the second week of May, then decreased to $2.36 million in the fourth week of May. This represents an 84% decrease compared to $15.63 million in the third week of May. Solana's next move is at a juncture simultaneously determined by whether the $78.17 support level is defended and the slowed ETF fund flows.

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