[DigitalToday reporter Yesle Kim (김예슬)] An analysis said Solana’s rising channel that has held for more than three months could instead be a precursor to further declines.

On May 27 (local time), blockchain media outlet BeInCrypto said Solana is trading about 3 percent above the channel’s lower trendline, and if that support breaks, the more than 50 percent plunge from mid-January to early February could be repeated.

Solana has been raising its lows within a parallel rising channel since Feb. 6. But a rising channel formed right after a sharp drop is often interpreted as a pattern of continued decline rather than a trend reversal. That means a bearish move is more likely to persist until it breaks above the upper trendline on a closing basis.

Trading volume was also cited as a warning signal. Since early February, buy volume has steadily declined, but the price has rebounded within the channel. The funds supporting the rise have weakened, and Solana is being pushed back toward the lower trendline amid shrinking volume.

On-chain indicators showed a similar pattern. Glassnode’s long-term holder net position change stayed in positive territory since early March, but the pace of increase slowed. Daily net position change, which rose to about 3.2 million SOL on May 25, fell to about 2.78 million SOL on May 26, a 13 percent decline in 24 hours.

A short-term holder indicator was also flagged as a burden. Glassnode’s short-term holder unrealised profit and loss is currently -0.157, higher than the deep capitulation zone seen during the February plunge. At the same time, it is close to -0.03, the six-month high recorded on May 11. The explanation was that short-term holders with limited losses could be the first to sell as the trend weakens.

A price inflection point was also presented. Solana is trading at $83.78, and $81.24 is key support as the lower end of the channel and the 0.786 Fibonacci retracement of the gains from April to May. A daily close below $81.24 would confirm a break out of the channel. The next downside targets are $76.61 and, with further declines, $63.21. If a continued-decline move like late January repeats, a path could open to $41.53.

Conversely, if it regains $84.89, near-term downside pressure could ease somewhat. But it needs to move above $87.45 on a closing basis, a level that has blocked every rebound attempt since May 20, to retest $93.17. The outlet reported that concerns about the current continued-decline pattern would also ease if it breaks above $98.29.