Solana rallies 16% after SOL RSI drops to 2023 low: Was that the bottom?

Solana (SOL) price dropped to a 2025 low at $125 on Feb. 28. However, the altcoin entered a 16% relief rally after the Chicago Mercantile Exchange (CME) announced the launch of Solana futures on March 17. The futures product now awaits regulatory approval from the Commodity Futures Trading Commission (CFTC).

Solana bears fail to pin SOL under $130

Since Feb. 24, Solana has formed a series of lower lows leading up to its yearly low at $125 on Friday. During this period, a clear bullish divergence formed between the price and relative strength index (RSI).

As illustrated in the chart, the rally on the 4-hour chart took place at the back of these bullish divergences. The bullish signal led to BTC’s swing pattern failure on the 1-day chart.

A swing pattern failure is a trend reversal indicator that is utilized to observe weakness in the dominant trend and identify potential reversals.

As analyzed, Solana is currently looking to close above its previous three days, and a confirmed close above $143 will validate the bullish SFP. The relief rally occurred following the RSI entering an oversold territory, marking its lowest level since June 2023, when Solana was priced at $15.

The immediate overhead resistance remains at $160. Flipping this level into support will further validate $125 as the local bottom.

Related: Bitcoin price metric hits ‘optimal DCA’ zone not seen since BTC traded in $50K to $70K range

Will SOL sell-off again in March?

As widely discussed over the past month, Solana’s token unlocks go live on March 1, which will see 11.2 million SOL entering the circulating supply. There will be a 2.84% increase in the total market cap, which is worth $1.62 billion at the moment.

The unlock event is largely investor-based, with companies such as Galaxy, Pantera and Figure looking to secure between $150 million to $3 billion in unrealized gains.

While the larger market expects volatility after the event, Keyrock Trading, a crypto markets maker platform, predicted the outcome based on analysis data from more than 16,000 token events.

Keyrock Trading highlighted that investor-based unlocks witnessed an average of 5% correction 30 days before the event. In this case, SOL suffered a significant 60% decline over the past month.

The platform termed the unlock event as a medium-size (1-5% supply) and stated,

“Medium unlocks historically see an ~8% decline within 30 days post-unlock.”

Based on the data, SOL is expected to witness some form of downward pressure for the short term after March 1. Jeremy, a crypto trader, predicted another lower low is on the cards for the altcoin, where Solana may form a bottom around $110-$120. However, the trader remained open to the scenario of $125 being a strong support level.

Related: Bitcoin price bounces 5% as analyst sees crypto slump end in March

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.