Bearish chart pattern hints at $70 Solana (SOL) price before a possible oversold bounce

cointelegraph.com:

Solana (SOL) price may fall to $70 a token in the coming weeks as a head and shoulders setup emerged on the daily timeframe and possibly points toward a 45%+ decline.

The chart below shows that SOL price rallied to nearly $217 in September 2021, dropped to a support level near $134 and then moved to establish a new record high of $260 in November 2021. Earlier this week, the price fell back to test the same $134-support level before breaking to a 2022 low at $87.73.

This phase of price action appears to have formed a head and shoulders setup, a bearish reversal pattern containing three consecutive peaks, with the middle one around $257 (called the "head") coming out to be higher than the other two around the $200 to $210 (left and right shoulders).

Meanwhile, SOL's three peaks have stood atop a common support level at $134, called the "neckline." A fall below it signals an extended downtrend to the level at length equal to the maximum distance between the head and the neckline.

In SOL's case, the distance is around $137, which puts its head and shoulders price target at nearly $170.

The bearish outlook came as SOL price dropped by more than 22% this week and currently the altcoin is around 55% from its record high, much in line with other large-cap digital assets, including Bitcoin (BTC) and Ether (ETH). 

At the center of the ongoing crypto market decline is the U.S. Federal Reserve's decision to unwind its $120 billion a month asset purchasing program followed by three or more interest rate hikes spread throughout 2022.

The central bank's loose monetary policies had assisted in pumping the crypto market's valuation from $128 billion since March 2020 to as high as $3 trillion in Nov. 2021. Therefore, the evidence of tapering