Solana's SOL Drops 20% But Technical Indicators Signal Reversal

Solana's SOL has recently experienced a 20% price drop from its June highs, settling just above $136. Despite this decline, technical indicators such as the Parabolic SAR and MACD are showing early signs of a bullish trend reversal. The Parabolic SAR indicator, which helps identify potential reversals in price trends, has flipped below the candles on the 4-hour chart, suggesting a shift in momentum. This bullish signal is further supported by the MACD, which is beginning to curve upward, indicating increasing momentum.

The key support level at $136 is crucial for Solana's potential rebound. Holding above this level could draw in fresh buyers and trigger a sharp move upward. The Bollinger Band midline also rests near $136, adding to the significance of this support level. If Solana can close above $140, short-term traders may target $147 next, with the upper Bollinger Band level offering potential resistance. However, with enough volume, Solana could push through and aim for $155, marking a 15% jump from current levels.

Despite the price drop, Solana's network activity remains strong, processing nearly 3,800 transactions per second. This is only a 13% drop from the 4,370 TPS recorded on June 12, indicating that network demand remains steady. The continued usage of the network, even during this downtrend, suggests that the selloff may have outpaced fundamentals. This divergence between price and network strength is often a sign of undervaluation, providing a strong setup for a potential reversal.

While the signs look encouraging, traders should remain cautious. If Solana loses the $136 level again, sellers might regain control, leading to a quick dip back to $130. However, the steady network demand limits downside risk and gives buyers a reason to keep defending current support zones. As long as demand for blockspace stays firm, Solana has a reason to rebound. The bullish signals from the Parabolic SAR and MACD, combined with the steady network demand, suggest that Solana may be nearing a turnaround. If bulls defend the $136 level, upside targets at $147 and $155 remain in play, and this bounce may only be getting started.