Solana has declined 20% over the past week, currently trading at $203.78 after falling from recent highs on September 18. The sharp selloff has pushed multiple technical indicators into oversold territory across various timeframes.
Market analysts are evaluating whether the current price action presents a buying opportunity or signals further downside ahead. Several technical indicators suggest SOL may be approaching levels that historically precede recovery phases.
The Relative Strength Index on 4-hour, 5-hour, and 12-hour charts shows oversold readings that often coincide with price bounces. One trader noted that similar oversold conditions on the 12-hour chart previously triggered a rally from $155 to $250.
Channel support analysis reveals SOL has touched key technical levels around the current $200 region. Multiple analysts have identified this zone as critical for determining the token’s near-term direction.
“Layered bids” from the $200 area upward have been spotted on 12-hour charts, suggesting institutional interest at these levels. SOL trades approximately $3 above this potential support zone at current market prices.
However, daily and weekly timeframe analysis presents a more cautious outlook. Technical charts indicate SOL needs to reclaim $216 to resume upward movement, while $172 represents a more conservative support target.
Weekly chart analysis suggests a retest of the $190-$175 range could provide an optimal entry setup for longer-term positions. Many traders expect continued price volatility before a sustainable bottom forms.
The recent decline has coincided with intense selling pressure across multiple sessions. Despite the bearish price action, some market participants view the oversold conditions as a contrarian buying signal.
On-chain data reveals a $315 million accumulation wave that helped absorb recent selling pressure. This institutional buying activity could provide a foundation for price stabilization and potential recovery.
Infrastructure developments and institutional adoption continue supporting SOL’s long-term outlook. Recent CoinGecko data shows public companies have begun adding Solana to their treasury holdings alongside Bitcoin.
The combination of oversold technical conditions and fundamental buying interest creates a mixed environment for SOL traders. Historical patterns suggest oversold RSI levels often precede recovery periods, though timing remains uncertain.
Current market conditions require careful evaluation of risk levels before establishing positions, particularly given the volatile nature of recent price movements.
Also read: $1 Billion Liquidation Storm Hits as BTC, ETH, XRP Collapse
