Is the $20-level next for ‘oversold’ Solana [SOL]

SOL was once very popular as it emerged on the heels of Solana’s aggressive growth, aiming to be the Ethereum killer. Fast forward to present day, however, and Solana is not as hyped as it used to be. In fact, SOL’s price has suffered a major downturn over the last few months.

SOL bottomed out at $25.86 recently as the bears extended their dominance. Its latest price means it was down by roughly 80% from its ATH of $259. The sell pressure pushed it low enough to interact with its descending resistance line marked by it May and January lows.

Is SOL ready to shine again?

SOL, at press time, had already achieved some upside and was trading at $28.99. This signifies some accumulation at recent lows, but will they be enough to sustain a significant uptick in the next few days? SOL’s price analysis suggests that there might be more to SOL’s current price level than what meets the eye.

Source: TradingView

The price interaction with the descending support aligned with a slight dip into the RSI’s oversold zone in the last two days. Its Money Flow indicator registered a slight uptick during the same period, confirming that there was some accumulation after its latest price drop.

SOL’s slight uptick seemed like a temporary relief rally after noting a strong sell-off in the last few days. The supply held by whales dropped from 46.48% on 10 June to 45.30% by 15 June. It did not register any uptick, suggesting that the slight price uptick might have been driven by retail accumulation.

Such an outcome suggests that there might not be enough buying pressure to support strong recovery in the short-term.

Source: Santiment

The Binance Funding rate metric also highlighted more interest from the derivatives market. However, it was in the negatives at -0.0116%, at press time – A sign that SOL’s market demand is still low. Solana’s blockchain has maintained healthy activity, despite the lack of strong signs of bullish pressure.

Solana’s development metric dropped slightly over the last few days. It had a reading of 13.02 points – Representing a higher activity level than at the start of June when it was as low as 10.61 points. It also registered strong NFT trading volumes worth $23.18 million during Tuesday’s trading session.

Source: Santiment

Conclusion

SOL might register some more upside if it manages to secure significant bullish volume towards the weekend. However, it is still under the mercy of the overall market sentiment which currently favors the bears. SOL is still covered by a cloud of uncertainty for now.