Solana Plunges in Market Correction, Double Top and Network Woes Weigh

Solana (SOL) has extended its downtrend, falling 5% today and forming a double top pattern. This sell-off comes amid broader market correction, with Bitcoin falling to $66,000. The SOL price has dropped below the neckline support of $163, potentially signaling further downside to $120. Furthermore, concerns over network congestion and a high transaction failure rate have emerged, raising questions about Solana's scalability and reliability.

Solana Coin Plunges Amidst Market Correction, Faces Double Top Pattern and Network Concerns

Market Sell-Off Extends Correction Trend

The cryptocurrency market underwent a prolonged decline on Friday, with Bitcoin dropping to an intraday low of $66,000. This selling pressure permeated the altcoin sector, including Solana. The SOL coin witnessed a 5% depreciation, reinforcing the formation of a double top reversal pattern. Amidst the broader market correction, analysts question whether this bearish setup will push SOL below $150.

Double Top Pattern Formation

Since mid-March, the cryptocurrency market has entered a corrective phase, with Bitcoin retracing from its previous high of $73,800. Consequently, Solana's price trajectory has oscillated below the $205 resistance level. Over three weeks, the coin has encountered resistance twice, suggesting that sellers remain in control at this price point.

Additionally, a daily chart analysis reveals the emergence of a double top pattern, a technical formation commonly observed at market peaks preceding sharp reversals. Amid the current market sell-off, the SOL price has plummeted 15% from its recent peak, currently trading at $173.

Network Efficiency Concerns

Apart from the double top pattern, Solana has come under scrutiny for its recent network performance. A critique by Kyledoops highlights significant network congestion and an alarming 76.8% transaction failure rate. Data from a Dune Analytics dashboard indicates a troubling trend in the network's inability to handle non-vote transactions effectively.

This increase in failed transactions demands immediate attention and action from Solana developers. The network's capacity and reliability must be enhanced to meet the high demands of a bullish market and maintain user trust.

Key Levels to Monitor

Under the influence of the bearish pattern, the Solana coin has declined by 6% and is currently testing the $163 neckline support level. A successful breach of this support would intensify the selling pressure and extend the correction to $120.

Conversely, a reversal from the $163 support would weaken the bearish thesis and allow for sideways consolidation.

Technical Indicators

• Relative Strength Index (RSI): A notable bearish divergence between the two peaks of the double top pattern suggests that sellers are gaining dominance over the asset.
• Exponential Moving Average (EMA): Over the past six months, the 50-day EMA slope has provided support for the SOL price during market corrections.

Conclusion

Solana Coin is facing significant challenges amidst the broader market correction. The double top pattern and network efficiency concerns raise doubts about the coin's ability to maintain its current price levels. Investors should monitor key technical indicators and network performance developments closely as the situation unfolds.