The mid-range trap of Solana – Here’s why traders should be cautious!

The price of Solana (SOL) has been going through a challenging phase in recent weeks. The rise of Bitcoin (BTC) to the $76,000 mark on March 17 helped SOL break out of a sideways range that had lasted since early February, thus triggering expectations for a new upward trend.

This breakout was accompanied by a noticeable improvement in momentum and trading volume, reinforcing market confidence in the potential for continued gains. However, the subsequent developments showed conflicting signals: the inability to maintain above the peak of $89.9 of the range soon revealed underlying bearish pressure.

Source: TradingViewOn the daily timeframe, the previous sideways structure was confirmed to be merely an accumulation phase following a strong downtrend. Although the OBV recorded an upward trend – reflecting accumulation activity – and the RSI remained above the neutral threshold of 50, indicating that upward momentum has not completely weakened, the overall picture remains less than positive. Notably, the supply zone of $105–120 continues to be a major barrier to any recovery efforts.

In fact, the most recent upward move couldn’t even conquer the $100 mark before the price retraced back to the median area of the range. This raises an important question: can SOL bounce back from here, or is a deeper breakdown forming?

Currently, the sideways price range of SOL is identified between $76.6 and $89.9, with a balance point at $83.3. The price is trading slightly below this level, amidst a backdrop of technical indicators leaning toward a bearish trend.

Specifically, the DMI on the 4-hour chart shows that the bearish trend is dominant, while the RSI is approaching the oversold zone – a sign that selling pressure has yet to be alleviated. At the same time, the OBV is at risk of setting a new local bottom, reflecting continued outflows over the past 10 days.

While the possibility of a bounce from the support area within the range cannot be ruled out, according to trading principles in a sideways market, optimal entry points typically lie at the two extremes of the range to maximize the risk/reward ratio. Therefore, opening a buy position at the median area – especially in the context of weakened market sentiment – is a less convincing option.

Source: CoinGlassNotably, Bitcoin’s “long squeeze” down to the $66,500 area pulled SOL into the liquidity zone around $83. Below, the $79 area – just beneath the bottom of $80.2 established on March 8 – continues to be a potential long liquidation cluster.

In the short term, the market needs to see the price recover and maintain above the $83–85 range to confirm the return of buying power. If this scenario occurs, SOL may extend the bounce to the $94–98 area, where liquidity for short positions is concentrated.