Solana's SOL token saw a 6.14% price drop over the last 24 hours, falling from $24.59 down to $23.08 as of July 25, 2023. Here are some key observations from the recent market data:

Bearish Engulfing Candle on the Daily

The daily chart formed a bearish engulfing candlestick pattern yesterday, engulfing the previous day's upside price action. This indicates strong rejection by sellers at resistance around $25.

Breakdown From Upward Price Channel

SOL broke down through support of an ascending price channel in place since mid-June. This breakdown could open the door for a deeper correction towards the $20-$21 support zone.

RSI Approaching Oversold Territory

The daily RSI is approaching 30 which is in oversold territory. This signals the pullback may be approaching exhaustion. Watch for bullish RSI divergence on shorter time frames for signs of a potential trend reversal.

Prediction: Bounce Between $22-$24 Expected

My prediction is SOL will see a bounce between $22 and $24 in the short term. The oversold RSI conditions suggest we could see a relief rally to form a higher low. However, significant resistance sits right around $25 which may limit upside potential in the near term.

Should You Buy the Dip in Solana Here?

With SOL dropping around 6% in the last day, is now a good time to buy the dip? Dollar cost averaging can help smooth out timing risk. Waiting for a clear higher low to form would provide a safer entry point. RSI divergence would be an additional confirming signal. However, the recent breakdown warns of further choppy action in the short term.

Can Solana Regain Its Price Strength?

After rallying over 30% in the last month, the question becomes whether Solana can regain its former price strength. On the weekly chart, SOL is still in a clear downtrend making lower highs and lows. To indicate a trend reversal, I would want to see SOL move back above the $40-$45 resistance zone and 50-week moving average.

In summary, while oversold bounce is likely, SOL must clear significant hurdles to indicate bullish trend resumption. Near-term upside appears limited, but the weekly chart shows room for larger upside once the downtrend decisively breaks. Patience is key right now watching for confirmation.

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