Well-known cryptocurrency analyst Bluntz issued a bearish short-term outlook on Solana following the asset’s steep selloff earlier this week. Besides publicly sharing his technical analysis on the X platform (formerly Twitter), he posted an illuminating chart showcasing Solana’s price movements.
Specifically, Bluntz pointed to a topping pattern developed on Solana’s daily timeframe, known as a “bearish selling climax” by traders. “I see 5 up visible daily for $SOL and a bearish sfp,” he tweeted, referring to the five consecutive green daily candles preceding the current large red down candle.
This pattern typically indicates that buyers became exhausted near recent highs. Moreover, he identified a bull trap forming at resistance near $108 when prices break above a resistance level but quickly reverse downward.
Additionally, the analyst noted that Solana remains in a clear uptrend on higher timeframes, with positively-sloping moving averages. However, he anticipates additional downsides in the short term before the next sustainable leg is higher. “Don’t be surprised if we pull back here back into the high 80s,” he commented, eyeing the high $80 level as potential support.
Furthermore, in a follow-up tweet later, Bluntz remarked on the swift pace of the decline this week. “So far, this dip is happening quite fast, faster than anticipated. Ideally, we bounce first before coming down for a C wave down into the 0.618 later,” he tweeted.
Here, he referenced the typical corrective Elliott Wave pattern, where prices fall in three distinct waves labeled A, B, and C. After a brief wave B bounce, he expects another drop to test the 61.8% Fibonacci retracement level, currently around $91.
At the time of writing, Solana trades around $96.50, down nearly 5% over the last 24 hours, according to CoinMarketCap pricing data. The recent swing high of about $108 is acting as tough resistance. However, despite his near-term caution, Bluntz remains constructive on Solana in the bigger picture. For the moment, though, he believes continuation to the downside remains the higher probability path.
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