Solana (SOL) has faced selling pressure recently, with its price declining to around $160, a level not seen in three months. This price decrease has caused disappointment among many traders, particularly considering SOL’s value was close to $293 in January. However, Santiment, a respected market analysis firm, suggests this widespread negativity could be actually paving the way for a price recovery.

Are Traders Too Bearish on Solana?

According to Santiment’s data, Solana’s current market sentiment is the most negative it has been since January 20th. That date marked the last significant market pullback. This indicates a significant portion of traders are now very pessimistic, anticipating further price drops for SOL.

Discussions about Solana (SOL) on social media platforms have also drastically increased. This heightened attention to SOL’s struggles suggests a growing lack of confidence in the cryptocurrency.

Historically, in market cycles, periods of extremely negative sentiment have often preceded price upturns. When the majority of traders are predicting continued downward movement, the market frequently reverses course and moves upwards.

This recurring pattern demonstrates how widespread selling driven by fear can create opportunities for astute investors to purchase assets at reduced prices before a subsequent market bounce.

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Sol Technical Analysis Hint Bullish Sign

Solana (SOL) has been in a consistent downtrend, characterized by a series of declining peaks and troughs. However, technical indicators are now pointing towards a potential recovery phase.

A key indicator suggesting a possible reversal is the 4-hour Relative Strength Index (RSI). Despite the price charting lower lows, the RSI is establishing higher lows. This divergence indicates a weakening of selling momentum.

Should Solana (SOL) successfully overcome the crucial resistance level at $173, it may signal the commencement of a renewed bullish trend. The subsequent significant resistance levels to monitor are $195.81 and $216.90. These levels align with previous zones where price consolidation occurred.

Currently, all attention is focused on Solana’s forthcoming price action. If negative sentiment persists concurrent with price stabilization, a price rebound may be developing in the near future.

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