Solana (SOL) has encountered significant challenges in recent weeks, with its price plummeting to a three-month low of around $160. This downturn has left traders disheartened, particularly those who saw the token reaching nearly $293 in January. As the price continues to fall, many are wondering if the downward trend will persist or if a recovery is on the horizon.

Despite the prevailing pessimism, market analysis from platforms like Santiment suggests that the current extreme bearish sentiment might actually signal a potential reversal. Historically, when market sentiment reaches extreme negativity, it often precedes a shift in price direction. Traders’ loss of confidence, combined with rising panic selling, typically paves the way for strategic investors to step in and purchase at lower prices, potentially setting the stage for a rebound.

Interestingly, social media discussions around Solana have been on the rise, reflecting an increase in attention surrounding the token’s current struggles. This surge in conversation indicates the growing concerns and uncertainty surrounding SOL, but it also highlights a crucial aspect of market behavior: when most traders anticipate further losses, the market often does the opposite and starts to recover. Therefore, the heightened attention and bearish outlook could be indicative of a potential shift in the near future.

From a technical perspective, Solana’s recent price action has formed a downtrend characterized by lower highs and lower lows, which signifies that the bears have been in control. However, key technical indicators suggest that the situation could soon change. One such indicator is the 4-hour Relative Strength Index (RSI), which is showing signs of divergence. While SOL’s price has been dropping, the RSI has been forming higher lows, pointing to a weakening of the selling pressure. This divergence suggests that the downward momentum might soon dissipate, setting the stage for a possible reversal in the price direction.

Traders are now closely monitoring the $173 resistance level. If Solana can break above this key level, it would provide confirmation that the downtrend may be coming to an end. Following that, the next major resistance levels to watch would be at $195.81 and $216.90, which are price zones where SOL had previously consolidated. A successful move beyond these levels would signal a strong recovery and could attract more buyers into the market.

Even though Solana’s recent price action has been disappointing, there are signs that the market may be nearing a turning point. The current low volatility, combined with the growing pessimism, suggests that the market could be close to stabilizing. As the price approaches crucial support levels, the potential for a rebound increases, especially if Solana can manage to break key resistance points.

In conclusion, while Solana’s price has faced significant downward pressure, the current market conditions may present an opportunity for traders looking for a reversal. The technical indicators, such as the RSI, along with the extreme bearish sentiment, suggest that the downtrend may soon come to an end. If Solana can break through resistance levels and regain momentum, it could experience a strong price recovery. Traders should remain vigilant, as the market could soon shift in favor of the bulls, especially if the negative sentiment continues to wane and the token stabilizes at key support levels.