Is It Time to Be Bearish on Solana? Is The Current Rebound Insufficient to Sustain Bullish Expectations?

In a surprising move, the crypto markets witnessed another dreadful pullback of the year, wiping out over $250 billion from the markets in just a few hours. On the other hand, the spot ETFs also witnessed record-breaking outflows of over $730 million, of which Bitcoin constitutes over $670 million and Ethereum just $60 million. These compelled the Solana price to slash hard below $200 and mark the interim lows at around $175. However, the bulls have jumped in and revamped a strong recovery to reach $187.

The current bloodbath is assumed to be the aftermath impact of the recent comments by the Fed Chair, Jerome Powell. On a question raised on his opinion on the National Bitcoin Reserve that President-elect Donald Trump had announced to constitute, Powell said that they are not allowed to own any Bitcoin and that they are not willing to change the law for the same. This raised serious concerns over the regulatory approach, which was believed to be positive as soon as Trump assumed office, but these comments raised huge concerns. 

Meanwhile, the SOL price, which was trying hard to keep up the rally close to $220, experienced a dreadful drop of nearly 20% as it broke the support at $216.76. With this, the question arises whether we need to be still bearish on Solana regardless of a 7% rebound.

The short-term price action displays the token triggering a strong rebound with a significant influx of buying volume. However, this rebound may certainly not elevate the levels above $200, as the RSI patterns suggest an extended consolidation between $197 and $186 could be witnessed before the next price action. The RSI in the 4-hours has not dropped to the oversold zone since August lows. However, it happened first on 10th December and now. 

Since then, the levels are restricted below the average levels, due to which the Solana price was forced to remain accumulated between $228 and $213. Therefore, if there is less involvement of bulls, then the price is believed to maintain a consolidation between $198 and $186 for a few days. However, this could be the crucial phase for the token, as a rise in RSI within the upper region could elevate the price beyond the bearish range; otherwise, an extended bearish action could drag the Solana (SOL) price close to $155.