Solana (SOL) price prediction: A bearish trend is forming within a downtrend channel, with the chart warning of a potential fall of 20%.

The first ETF for Solana (SOL) will trade on Wednesday. After the news broke, its stock price soared 5% on Monday to $160. However, this surge did not last long as SOL nearly erased all its gains on Tuesday. Technical charts warn that if buying pressure persists, there is a risk of a 20% fall.

In a relatively short time frame, SOL has failed to maintain above the 50-day and 200-day Exponential Moving Averages (EMA) for over a month. Despite forming several bullish structural breakout signals, including last week's breakout at $148, SOL has yet to convert this into a sustained upward trend.

The level of 148 dollars is currently facing pressure, and a break below 137 dollars will confirm a lower low, indicating a potential further fall in the short term.

To regain bullish momentum, SOL needs to successfully retest the demand zone of $137 to $145, and then recover above $160.

(SOL/USDT 4-hour chart, source: Trading View)

On a higher time frame (HTF), the overall trend remains bearish. In May, SOL failed to break through the major resistance level of 180 USD, subsequently forming a bearish trend within a downward channel.

Although this pattern may lead to a bullish breakout, SOL has remained highly sensitive to Bitcoin's weakness over the past month.

Although Bitcoin is hovering around ATH levels, the price of SOL has fallen nearly 50% since January 19, performing relatively poorly.

If the downward trend continues, the daily trading volume of the asset may retest between $95 and $120, which would provide a more attractive entry point for long-term investment. However, if the closing price on Sundays strongly breaks above $160 in the coming weeks, it could reverse market sentiment and trigger a bullish reversal, thereby providing short-term momentum.

(SOL/USDT daily chart, source: Trading View)

URPD issues an important signal

The trading price of SOL on Tuesday was around 148 USD, and the UTXO actual price distribution (URPD) indicator (which tracks the token purchase price) provides important basis for determining support and resistance levels. The URPD indicator shows that the current price is around 144.5 USD to 147.7 USD, with a supply ratio of 14.3%. If buying pressure continues, this will be a key range for a reversal.

Glassnode data shows that it is crucial to maintain above $144. Falling below this level signals potential weakness and increases the likelihood of retesting lower support areas.

The supply volume in the range of 97 to 100 dollars accounts for 3%, while the supply volume in the 124 dollar range accounts for 1.58%, which provides a buffer against further falls. If the price fails to hold above 144 dollars, the market will face the risk of further declines to these levels, and a decrease in supply may exacerbate volatility.

Resistance is seen around 157 dollars, with 5.55% of the supply concentrated here, posing a challenge to upward movement. Currently, the range of 144.5 dollars to 147.7 dollars forms a solid foundation that SOL investors need to defend.

(Source: Glassnode)