Solana (SOL) Price Poised to Bounce as Gaussian Channel Pattern Provides Strong Support

Solana is caught in a period of continued bearish performance due to the notable decline in the broader crypto market, with its price plummeting by nearly 23% in the past week.

Optimism is brewing again as Solana (SOL) shows potential for an upside momentum after a period of heightened volatility. Crypto expert and investor Trader Tardigrade identified an encouraging trend on SOL’s chart, with a bullish pattern providing strong support for the price.

SOL, which has been hit hard by broader crypto market downturn, has seen its price plummet by nearly 23% in the past week. After this robust downward move over the past few days, the altcoin might be set for a price recovery as promising trends unfold on SOL’s chart.

Gaussian Channel Pattern Provides Strong Support For Solana

SOL, which is currently trading at $13.06 at press time, is poised for an interesting turn in its price trend. Having experienced substantial selling pressure that pushed it down from highs of $250 in 2021, SOL might be approaching a crucial technical area that could alter its trajectory.

Trader Tardigrade highlighted that SOL had formed a Gaussian Channel pattern on the weekly time frame, which signals an increasing momentum.

It is worth noting that the mid-band of the Gaussian Channel formation is providing support for Solana. At this point, the crypto expert highlighted that the altcoin’s downward trend is expected to slow down or witness a price reversal.

However, whether Solana can overcome key resistance levels and move higher again will depend on continued momentum and strong buying demand. Meanwhile, certain developments such as meme coins fatigue and the massive $1.7 billion SOL token unlock this weekend present robust bearish pressure for the asset.

While these developments may hint at impending bearish pressure, Trader Tardigrade remains optimistic about SOL’s long-term performance. The expert’s bullish sentiment is backed by the Solana ecosystem’s persistent growth and recovery from supply disruptions in the past.

Large SOL Holders Are Pivotal For Next Leg Of Recovery

Given the present volatility in SOL’s price, on-chain metrics from Glassnode reveal that investors seem to be in a state of fear. This shift in investors’ sentiment is evidenced by a sharp reduction in large SOL investors, commonly regarded as whale holders.

Seasoned technical analyst and trader Ali Martinez reported a decline in wallet addresses holding more than 10,000 SOL in the past month. The drop raises concerns about whether these large investors are repositioning or taking profits as they await possible price rebounds. Such weak investors’ sentiment puts SOL’s price at risk of witnessing an extension of its downward movements to lower levels.

SOL Transfer Volume Sees Significant Drop

Investors’ waning confidence and interest are also reflected by a sharp decline in SOL transfer volume, indicating reduced network activity. A decrease in transfer volume implies a lower demand for transactions on the Solana blockchain.

Data from Ali Martinez shows that SOL transfer volume has fallen from a whopping $1.99 billion to a mere $14.57 million. This sharp decline took place in the space of 3 months, particularly since November last year. As the altcoin holds key support levels, this development questions the sustainability of its position above these zones.