Solana Price Forecast: Drop to $60 Seems Likely After Bearish Trend Line Break

Solana (SOL) continues to struggle to reach higher price zones as macroeconomic conditions continue to be unfavorable for the crypto market.

This top altcoin has dropped by 5% in the past 7 days after failing to climb above a key resistance at $78.

Meanwhile, the token just broke a long-dated trend line support, increasing the odds of a sustained downtrend to much lower price zones like $68 or even $60.

Trading volumes rose to nearly $1.9 billion yesterday following this trend line break, indicating that the selling pressure could be accelerating.

Although the United States temporarily paused its strikes on Iran, persistent geopolitical tensions continue to keep oil prices at high levels, which translates into persistent inflation in the U.S.

This, in turn, influences a hawkish monetary policy by the Federal Reserve, which is a headwind for crypto prices. In an environment marked by high rates, investors tend to shun high-risk assets as they can get solid returns from low-risk products.

On-Chain Signals Still Indicate a Big Price Move Ahead for Solana

Looking at on-chain metrics, DEX volumes are about to finish the month with a 30% decline as interest in meme coins has waned during this bear market. This also represents a 66% drop from this year’s peak of $136 billion in January.

Meanwhile, we have been tracking a signal related to Solana’s daily active users that has marked the beginning of strong price movements in the past.

This signal consists of a crossover between the 30-day moving average and 50-day moving average. In late June, the 30-day MA crossed above the 50-day MA, which typically means that market participants are positioning for a big price move.

This was true in January this year, as Solana started a strong descent since that crossover happened. We have not yet seen that kind of movement unfold, but the latest trend line break could be the signal we need to predict the direction of that move if it happens.

SOL Could Drop to $60 as Bearish Momentum Accelerates

Heading to the daily chart, we can see that a short position at this point could yield an interesting 2x risk-reward ratio if the target is set at $60 and the stop price above the $78 resistance.

SOL/USDT Daily Chart – Source: TradingView

This bearish outlook is based on depressed on-chain data, a challenging macroeconomic backdrop, weak demand for memecoins, and ongoing capital rotation toward other areas of the tech space like AI and space travel.

The first take-profit level for this trade would be the $68 level, followed by the $60 area, which is Solana’s current cycle low.

A retest of the $78 level from below, followed by a strong drop, confirmed the price action’s bearish bias. However, the price could still reverse its course and break past this resistance. For this reason, the stop price is set right above that mark.

Negative momentum has been accelerating as well. The Relative Strength Index (RSI) currently sits at 43. A move below 40 for this technical indicator would further confirm a bearish outlook, as it would mean that sellers are in control of the price action.