Key Highlights:
- Solana has fallen by 10% in the last 24 hours, now trading below $140.
- The cryptocurrency may continue to decline as market sentiment weakens.
Market Sentiment Weakens as Cryptos Face Significant Losses
SOL, the sixth-largest cryptocurrency by market capitalization, has seen a 13% drop in value this week, marking its third consecutive week of losses. This downturn coincides with the recent performance of Solana exchange-traded funds (ETFs) in the United States, which recorded their lowest net inflows since their launch two weeks ago, indicating diminished institutional demand.
According to Sosovalue, American spot ETFs for Solana recorded a net inflow of only $1.49 million on Thursday, mainly attributed to the Bitwise Solana staking ETF. This minimal influx suggests a waning interest among institutional investors.
In addition to the declining inflows, data from CoinGlass reveals that SOL’s open interest in futures contracts has decreased by 3.34% in the last 24 hours, dropping to $7.35 billion. This reduction indicates that traders are closing long positions or reducing their leverage.
As a result, the funding rate weighted by open interest has dipped to a negative level of -0.0076%, down from nearly neutral earlier in the day. This shift suggests that traders are taking more short positions. If prevailing market conditions continue, bulls may face a challenging battle for recovery.
Could Solana Drop to $120?
The daily chart for SOL/USD continues to reflect a bearish trend as Solana has underperformed in recent days. The cryptocurrency has experienced a slight decline for the fourth consecutive day this week after falling below the psychological level of $150.
As of this writing, SOL trades at $138 and aims to test the recent low of $126 recorded on June 22. If SOL breaks below this level, it could face strong support around the psychological mark of $100 in the coming days or weeks.
The relative strength index (RSI) has plummeted to 36, inching into oversold territory, signaling increased selling pressure. Additionally, the moving average convergence divergence (MACD) has failed to cross above the signal line, prolonging the downward trend.
Nonetheless, if technical indicators show improvement and SOL maintains its value above $126, a slight rebound towards the supply zone of $155 may be possible. However, the next resistance level at $175 is likely to pose a significant challenge in the short term.
