Solana Hits Two-Month Low. Where Could the Rebound Begin?

Solana continued its downtrend this week, kicking off Monday with notable losses. It shed almost 3%, dropping to its lowest value in more than two months.

A recovery followed on Tuesday, with the altcoin recovering almost half of the previous day’s losses. However, Wednesday’s price action shows that it is still grappling with significant selling pressure. SOL retraced to a low of $89, a level not seen since August 24.

Although it rebounded and turned green at some point, bearish sentiment remains dominant. At the time of writing, the asset is printing a doji candle, suggesting indecision among traders.

Amid the persistent downtrend, it is important to understand why the asset has maintained its downward trajectory.

Notably, most of Solana’s decline has not been isolated. The global cryptocurrency market cap also retraced on Monday before recovering the following day. It subsequently experienced another significant decline a few hours ago but has since rebounded.

Sentiment across the broader market remains significantly bearish, as reflected in the Fear and Greed Index. On the first day of the week, the metric dropped to 35, indicating fear. Interestingly, the last time it fell to this level was in July.

Although the metric has since improved, it still reflects fear among market participants. Beyond the broader market sentiment, Solana may also be facing additional selling pressure from developments specific to its ecosystem.

Recall that Binance recently fell victim to an attack by threat actors who reportedly stole more than $6 billion in cryptocurrency. Although the exchange worked to freeze some of the stolen assets, it couldn’t prevent the hackers from laundering the remainder. Among the assets involved was 970,522 SOL, valued at approximately $96 million.

A recent report from Lookonchain indicates that the hackers have started selling the coins for BTC, potentially adding to Solana’s selling pressure.

When Will Solana Rebound?

Solana could recover alongside the broader market if sentiment improves. However, it remains uncertain when such a reversal will happen.

Technical indicators remain deeply bearish, although some suggest that the asset could be approaching a potential rebound. For example, the Relative Strength Index (RSI) dropped to 26 on Monday after breaking below 30 the previous day.

SOL remains deep in oversold territory, indicating that selling pressure is still significant and that buyers have yet to establish a sustained recovery. Nonetheless, the current reading also suggests that the asset could be approaching a point where a rebound becomes more likely.

The Bollinger Bands reflect a similar pattern, with SOL trading close to the lower band since last week. The 1-day chart also shows several instances in which prices briefly moved below this boundary, highlighting the intensity of the selling pressure.

While these indicators suggest that a rebound could be approaching, they do not establish when it will happen. Previous price movements, however, offer some clues about the levels that could determine the next significant bounce.

Last week, Solana lost the $96 support level. Although it was not one of the strongest support levels on the chart, it represented an important threshold below which a steeper decline became possible. Since breaking below this mark, the next major level to watch is $72, a price last seen in July.

It remains to be seen whether such a decline will materialize. However, following the decisive breakdown below the first support, the likelihood of a deeper correction has increased. Nonetheless, $84 represents another important level worth watching before SOL reaches the lower target.

In the short term, a recovery towards $96 remains possible if buying pressure returns. Nevertheless, based on previous price action and the current technical outlook, a decisive reversal may not materialize within the first two weeks of November.

Until then, $84 and $72 remain the key downside levels to watch, while reclaiming $96 would provide an early indication that bullish momentum is returning.

The post Solana Hits Two-Month Low. Where Could the Rebound Begin? appeared first on CoinTab News.