Solana’s price is currently hovering at $82 after experiencing a significant drop of over 4% on Tuesday. The layer-1 blockchain is under pressure, trying to maintain support just above the critical $80 level. This recent price movement highlights the precarious position of SOL as it grapples with market dynamics.
On the technical front, Solana’s trading pattern indicates a bearish trend, having fallen below crucial moving averages, including the 100-hour simple moving average. A key trend line has formed, with immediate resistance at $85, which is critical for any recovery attempt.
Yet, amidst this uncertainty, on-chain metrics present a somewhat optimistic picture. The stablecoin supply on Solana has surged by approximately 14% over the past week, now totaling $15.34 billion. This increase suggests that users are cautiously holding capital on-chain, even amid a generally risk-off sentiment that has permeated the broader market.
According to futures market data, there has been a notable decline in trader interest, with SOL futures Open Interest decreasing by 2.74% to $5.08 billion. Long liquidations amounting to $6.09 million contrast sharply with short liquidations at just $2.01 million, indicating a glaring bearish bias among traders. The current funding rate stands at -0.0061%, which further underscores the heightened preference for bearish positions.
Despite these bearish indicators in the derivatives markets, institutional investors seem undeterred. On Tuesday, U.S. spot SOL exchange-traded funds (ETFs) saw inflows of $8.43 million, demonstrating continued demand for Solana at these lower price points. This trend may provide the necessary support to establish a price bottom, as ongoing institutional purchases could signal a potential reversal.
On the daily chart, the Relative Strength Index is currently at 27, revealing oversold conditions which may point towards a forthcoming rebound. Additionally, the Moving Average Convergence Divergence (MACD) is showing signs of contracting negative momentum, suggesting that bearish pressure might be waning, although the general sentiment remains cautious.
Key price levels for traders to monitor include the immediate support at $80, as identified through Fibonacci retracement levels. If a break below this threshold occurs, it could lead to further declines towards $75, and potentially target $70 if the downward spiral continues. Resistance, on the other hand, sits at $85, with further barriers anticipated at $92 and $96. A successful breach of $96 could open the door for a movement towards $105 and even $112.
As Solana navigates this challenging landscape, it has made attempts earlier this week to push beyond $78 and $82. However, the price has struggled to maintain its gains near the $90 mark, and traders will be keenly watching how the market shapes up in the coming days. The interplay of institutional demand and retail trader sentiment will be integral in determining whether Solana can survive this phase of volatility and emerge stronger.
