Over the past week, the price of Solana (SOL) has dropped nearly 20%, leading many investors to question the next trend. However, analysts view this as a golden opportunity to accumulate, as the RSI indicator has reached a rarely seen oversold level.
History shows that whenever it falls into this situation, SOL often tends to rebound strongly — it even increased from 155 USD to 250 USD in just a few trading sessions. Will this explosive scenario repeat itself, bringing SOL back on the path to conquer new heights?
The oversold situation of SOL
In the past seven days, Solana has experienced significant volatility. According to data from Coinphoton, SOL is currently trading at 203.78 USD, down 20.18% from a recent peak on September 18.
In this context, examining SOL's price action across multiple timeframes shows significant selling pressure. However, the technical signals also indicate that this token is in an oversold state. This has led many analysts to question whether the recent decline opens up an opportunity to 'catch the bottom' or is simply a 'fakeout' in a larger trend.
On the 4-hour chart, some traders have noticed that SOL has hit the support zone while the RSI indicator signals an oversold condition. Similar setups have also been observed on the 5-hour and 12-hour charts, typically occurring before strong technical bounces.
A trader remarked: '$SOL is severely oversold. In fact, the last time the 12-hour indicator was this oversold, the price increased from 155 USD to 250 USD.'
Another trader pointed out an interesting signal on the 12-hour chart: 'overlapping buy orders' from the area around 200 USD and above. This could be an important level to watch before considering opening larger positions. Currently, SOL is only about 3 USD away from this area.
The daily and weekly charts have yet to provide positive signals for the bulls. Daily analyses warn that SOL needs to reclaim key levels like 216 USD — or at least hold 172 USD in a more optimistic scenario — to continue its upward momentum towards all-time highs. On the weekly chart, many traders consider retesting the 190 USD – 175 USD area as an 'ideal' setup, indicating the market may continue to fluctuate before forming a sustainable bottom.
In addition to technical factors, fundamental factors and on-chain data also play an important role. As reported by BeInCrypto, a recent accumulation of 315 million USD has helped absorb selling pressure and create a foundation for a potential recovery. At the same time, capital flow from institutions and infrastructure upgrades also provide long-term momentum for SOL. A report from CoinGecko shows that public companies are starting to hold Solana, not just Bitcoin.
However, another analysis from BeInCrypto has highlighted that a wave of long position liquidations in the derivatives market could trigger another test of the 200 USD area if confidence wanes. Investors need to closely monitor on-chain flows and SOL's response at critical price levels. History shows that Solana has exhibited both rapid price increases and strong corrections. Therefore, risk management remains a crucial factor in navigating the current market.