Solana peaks at a 7-month high despite new addresses falling to the lowest level since April.

While the long term picture remains promising, short term investors should prepare mentally for the possibility of corrections. Market history shows that each explosive growth phase is usually accompanied by notable price corrections.

Solana is approaching saturation point

The Relative Strength Index (RSI) of Solana is approaching a sensitive area. While an RSI level above 70 typically signals overbought conditions, history shows that SOL often reverses earlier, with previous declines starting right when the RSI exceeds the 62 mark. Currently, the RSI is at 61, placing Solana on the verge of saturation and signaling the possibility of a short term correction before the overall upward trend continues.

SOL/USDT Daily Chart | Source: TradingViewThe on-chain data also reflects a similar trend: the number of new addresses on Solana has dropped to its lowest level since April, marking the lowest point in the past five months and indicating a decreasing interest from new investors. In the cryptocurrency market, a decline in new addresses often signifies weakening growth momentum.

This correction may be an inevitable consequence after a series of price increases lasting a month and a half, causing new investors to feel "anxious". In this context, many may choose to stay out and observe the market rather than risk entering at a potential peak.

New address of Solana | Source: Glassnode## SOL price may face downward pressure

At the time of writing, Solana is trading around the 219 USD mark, firmly above the support level of 214 USD. This is the highest price in the past seven months, with SOL facing strong resistance at 221 USD. Maintaining this level will be crucial in shaping the short term direction of this coin.

The SOL/USDT chart on the 12-hour timeframe | Source: TradingViewIf the upward momentum weakens, the price of Solana may adjust to 206 USD, even falling to test the support level of 195 USD. This adjustment is completely in line with the RSI signals and address data, reflecting a temporary cooling of the market.

Conversely, if the demand from SOL investors increases significantly, this altcoin has the potential to overcome the bearish pressure. A breakout above 221 USD will reinforce the upward trend, paving the way for Solana to reach the 232 USD mark and dispel expectations of an upcoming correction.

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