Solana Is Oversold, Price Recovery From $170 May Face Challenge

Solana’s price has faced significant challenges in recent months. After reaching its all-time high (ATH) of $295 in mid-January, the altcoin has seen a steady downtrend, now trading around $173. 

Despite efforts to bounce back, Solana’s recovery appears difficult due to a combination of market sentiment and investor skepticism. 

Solana Is Facing Bearishness On Multiple Fronts

The weighted sentiment surrounding Solana has taken a bearish turn, with many holders expressing a lack of confidence in the token’s recovery. Investor sentiment plays a crucial role in the success of any cryptocurrency, and the prevailing skepticism among Solana holders could prevent further positive momentum. As a result, many investors are holding off on participating in the network, stalling any potential price growth.

This shift in sentiment has a direct impact on Solana’s price movement. If holders remain bearish, it may result in decreased trading activity, further discouraging potential buyers and hampering recovery. With Solana’s price continuing to fluctuate around $170, a major shift in sentiment will be necessary for the altcoin to regain any substantial traction in the market.

Solana Weighted Sentiment. Source:  Santiment

In terms of macro momentum, technical indicators such as the Relative Strength Index (RSI) show mixed signals. Recently, the RSI for Solana fell into the oversold zone below 30, a common trigger for reversals in price action. 

However, while this typically indicates a potential for recovery, Solana has struggled to exhibit the sharp rebounds typically seen after such dips. This sluggish recovery suggests that the altcoin may face difficulties in making a strong comeback, especially when weighed down by broader market conditions.

Solana RSI. Source:  TradingView

SOL Price Faces Resistance

Solana’s price is currently at $173, facing resistance at the $183 level. Given the current bearish sentiment, Solana might struggle to break this resistance and continue its rally. If it fails to breach $183, the altcoin could experience further downward pressure, with the next critical support level at $161.

Failure to hold the $161 support could result in an even steeper decline, bringing Solana’s price closer to the downtrend line and potentially triggering additional losses. Losing this key support could signal prolonged bearish sentiment, extending the losses for SOL holders.

Solana Price Analysis. Source:  TradingView

However, should Solana successfully breach $183, it could reclaim upward momentum and push towards $201. This breakout would invalidate the current bearish thesis and help recover some of the recent losses. The ability to secure $183 as support will be pivotal in determining whether Solana can reverse its current downtrend.