Crypto analyst Altcoin Jim has a bearish outlook on Solana (SOL) due to signs of weakness in its price structure. He highlights that SOL is forming lower highs, which indicate reduced buying pressure.
Moreover, the presence of a descending triangle adds to the negative outlook, signaling a potential drop in price. The chart illustrates a series of lower highs since Solana peaked earlier in 2024.
Each attempt to rally has been weaker than the previous one, a clear indication of waning buying pressure. This is particularly evident in the rounded tops seen in April and August, where the price failed to surpass previous highs.
These lower highs imply that sellers are progressively taking over and progressively lowering the market despite sporadic efforts by bulls to regain control. Usually reflecting a market trying to sustain upward momentum, lower highs are a negative indication.
As each high becomes lower, it indicates that buyers are losing confidence, and selling pressure is increasing. In the case of Solana, this pattern has persisted for several months, reinforcing Altcoin Jim’s bearish view.
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Descending Triangle: A Bearish Pattern?
The chart also highlights a descending triangle formation, with the horizontal support level at approximately $130 and the declining trendline from the lower highs. Descending triangles are considered bearish continuation patterns that typically signal an impending breakdown.
As Solana’s price continues to form lower highs while being supported around the $130 level, the pressure is building for a potential downside move. Altcoin Jim’s analysis suggests that this descending triangle could lead to a price crash if the support level is breached.
The combination of the lower highs and this pattern creates a technical setup where further downward movement appears likely unless there is a strong catalyst to reverse the trend.
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Distribution Phase and Bearish Outlook
Altcoin Jim also points out that Solana appears to be in a distribution phase, a period where smart money (large investors) gradually sells off their holdings. The rounded tops and lower highs observed on the chart support this theory.
Distribution phases are often followed by steep declines as selling accelerates once support levels give way. For Solana, this means that if the descending triangle pattern resolves to the downside, the next key levels to watch would be in the $110 to $100 range.
A failure to hold these levels could lead to even more losses, especially if the broader market environment remains unfavorable. Altcoin Jim’s analysis paints a cautious picture for Solana (SOL).
The lower highs, descending triangle, and potential distribution phase all point to a bearish outlook, with a potential price crash on the horizon if key support levels are breached.
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