SOL Oversold Alert – SOL Drops 20% in a Week, Is This the Perfect Dip to Buy?

Key Points

• SOL Oversold Alert, SOL Drops 20% in a Week
• $200–$175 zone seen as key accumulation area
• Firedancer upgrade and $315M inflows add bullish support
•  Traders split: fakeout or start of a major rebound?

Solana (SOL) just plunged more than 20% in the past seven days, falling from $255 to around $203. At first glance, this might seem like just another bearish swing.

But zoom in, and you’ll find something different this time, SOL is oversold, and that’s making traders pay close attention.

SOL price volatility. Source: TradingView – Techtoken

The Relative Strength Index (RSI), a popular technical tool, is currently flashing red. In fact, on the 4-hour, 5-hour, and 12-hour charts, RSI is hitting extremely low levels.

This rarely happens, and when it does, history has shown that a sharp price recovery often follows.

Traders are referencing the last time the 12-hour RSI dropped this low, SOL exploded from $155 to $250 in just a few sessions. Some believe we could see a similar bounce this time.

$SOL/usdt 12 hour$SOL is disgustingly OVERSOLD, in fact, the last time the 12 hour was this oversold, price pumped from $155 to $250 🎯

Price is currently retesting the HTF ascending triangle breakout presenting a FIRE entry innit 🔥🔥 pic.twitter.com/aZrN5RZGtx

— Satoshi Flipper (@SatoshiFlipper) September 24, 2025

Right now, eyes are locked on the $200–$175 range as a strong accumulation zone. This is where layered bids are building, and where support has historically held up well. At current levels, SOL is only a few dollars away from this zone.

That said, technical resistance remains around $216, and support must hold above $172 for any bullish reversal to confirm. Until then, this could still turn out to be a fakeout rally, a short-term bounce before more downside.

SOL/USDT chart. Source: X – Techtoken

But if you’ve been waiting to enter the Solana market, this SOL oversold signal might just be the opportunity.

Fundamentals Add Fuel to the Bullish Fire

Looking beyond the charts, Solana’s on-chain activity and network growth are adding weight to the bullish case.

First, over $315 million worth of SOL was accumulated during this downturn. That’s not retail traders, that’s whales and smart money, and it shows confidence in the network’s long-term value.

Institutional demand is also picking up. According to a recent CoinGecko report, public companies are now starting to hold Solana in their treasury portfolios. This is a big shift, as previously Bitcoin and Ethereum dominated corporate crypto holdings.

$SOL, 7 weeks later and it’s looking beautiful.

Breaking out of the weekly range → now stalling at ATH supply (normal).

If we get a retest into $190–$175 (weekly breaker), that’s where I’ll size heavy and rotate a good chunk of my ETH bag into SOL.

Survive this chop, and… https://t.co/O9bX77qzJO pic.twitter.com/dZkEbKj8mE

— Scient (@Crypto_Scient) September 23, 2025

The upcoming Firedancer upgrade, a new validator client designed to boost Solana’s scalability and stability, also adds long-term value. Once launched, it’s expected to reduce network outages and improve transaction throughput.

In other ecosystems, similar bullish momentum is brewing. For example, Cardano’s 2025 roadmap is now signaling renewed investor confidence in ADA’s long-term value (source).

The BNB Chain is also heating up, driven by key infrastructure upgrades and growing DeFi activity (source).

Public companies are starting to hold Solana—not just Bitcoin.

In this article, we explore how Solana treasuries work, which firms are leading adoption, and how holding $SOL compares to $BTC and $ETH.

Read the full guide 👇https://t.co/TDQEMEAq9x

— CoinGecko (@coingecko) September 25, 2025

In other words, while short-term prices are shaky, the long-term Solana fundamentals are strengthening. And this makes the current SOL oversold condition even more appealing for patient investors.

Market Sentiment Remains Cautious but Hopeful

Despite these bullish indicators, the market is still cautious. Why? Because the crypto space is unpredictable, and liquidations in derivatives could add more downward pressure.

Data from BeInCrypto shows that a wave of long liquidations has occurred, meaning traders who used leverage to go long are being wiped out. If this trend continues, SOL could revisit the $190 or even $175 level before stabilizing.

However, even in this uncertain mood, many traders are optimistic. They believe the oversold RSI, increasing accumulation, and strong fundamentals point toward a near-term recovery.

Social media sentiment is also turning. Crypto Twitter and trading forums are filled with charts, predictions, and memes calling this dip the “best SOL entry since early 2023.”

While memes aren’t market indicators, they do reflect growing interest and retail participation, which can drive momentum when combined with whale support.

The key will be whether SOL can hold above $200, reclaim $216, and push back toward the $230–$250 range. If it can do that while the SOL oversold signal remains active, the stage could be set for a strong rebound.

Meanwhile, other projects are also working to recover from their own market challenges. The Ronin Network’s buyback plan is one such example, aimed at restoring investor trust after heavy volatility (source).

For those looking at safer alternatives, there’s also growing interest in low-risk DeFi options on Ethereum, where yield strategies remain resilient despite market corrections (source).

Should You Buy the SOL Dip Now?

So, is it time to jump in?

That depends on your risk tolerance. For long-term investors, this SOL oversold setup, combined with strong fundamentals, might represent a high-potential entry. But for traders looking for quick flips, it’s crucial to wait for confirmation.

Watch key levels closely:

• Support: $175–$190

• Resistance: $216–$230

If SOL reclaims and holds above resistance, momentum could build fast — especially if macro conditions remain favorable.

On the other hand, if confidence dips again and liquidations pick up, expect another test of the lower support range. Either way, keeping an eye on RSI levels, volume trends, and on-chain data will be critical.

With so many signals flashing at once, one thing is clear: SOL is at a pivotal moment, and what happens next could define its trajectory for the rest of the year.

And while Solana makes headlines, Tether’s USDT reserves are also under increasing scrutiny, especially as stablecoin dominance grows across exchanges (source).