Solana's SOL Drops to Three-Month Low, Bearish Sentiment Signals Potential Rebound

Solana, the high-speed blockchain platform, has been facing a challenging period, with its native token SOL dropping to a three-month low of around $160. This decline has left many traders frustrated, especially considering SOL's previous highs near $293 in January. However, market intelligence platform Santiment suggests that the current bearish sentiment could signal a potential rebound for the token.

Santiment reports that Solana's sentiment is at its lowest level since January 20, when the market last experienced a sharp pullback. This indicates that a significant number of traders have become extremely bearish, anticipating further declines in SOL's price. Social media discussions around Solana have also surged, reflecting the growing concern and waning confidence in the token.

Historically, extreme bearish sentiment has often been followed by a price recovery. When most traders expect further losses, the market tends to move in the opposite direction, creating opportunities for smart investors to buy at lower prices before a recovery. This pattern has been observed in past market trends, and it could be a sign that Solana is ready for a strong bounce.

Technical analysis of Solana (SOL) reveals that the token has been stuck in a downward trend, forming a clear pattern of lower highs and lower lows. However, the 4-hour Relative Strength Index (RSI) suggests that a recovery could be on the horizon. While the price has been making lower lows, the RSI is forming higher lows, indicating that selling pressure may be fading.

If SOL manages to break above the key resistance at $173, it could signal the beginning of a new upward trend. The next major resistance levels to watch are $195.81 and $216.90, which align with previous price consolidation zones. As the market awaits Solana's next move, a recovery could be on the horizon if the bearish sentiment persists while prices stabilize.