Solana experienced a modest rebound of 11% on Friday, trading just below $90 on Monday. However, despite this uptick, the token remains down 14% for the week and has witnessed a staggering 44% decline over the past three months as the broader cryptocurrency market continues to feel the pinch of adverse conditions.
In a surprising twist, the Bitwise Solana Staking ETF managed to attract $1.48 million in new inflows on February 6, pushing its total assets under management to $447 million. This inflow represents a mere 0.33% of the fund’s total AUM, hinting at ongoing institutional interest even amid falling prices.
Despite the recent performance struggles, net assets held by spot Solana ETFs reached $674 million this week. However, the outlook isn’t entirely rosy, as most U.S. spot Solana ETFs reported a total of $11.86 million in outflows, with the notable exception of Fidelity’s FSOL, which has yet to disclose its figures.
This dichotomy between ETF inflows and price performance suggests an intriguing narrative: while short-term traders may be betting against the token, long-term investors appear to be seizing what they view as an opportune moment to accumulate. The current price decline may be seen as an entry point for staking exposure, indicating a divide in market sentiment.
On the derivatives front, market activity reveals dwindling interest among traders. The open interest for SOL futures has fallen by 2% to $5.32 billion, shedding light on a cautious approach among participants as they navigate the prevailing market conditions. Such a reduction signals a hesitance to lever up in this volatile climate.
Derivatives Market Maintains a Bearish Tone
In terms of trading activity, total liquidations over the past 24 hours amounted to $8.38 million. Interestingly, long positions faced $5.05 million in liquidations, while shorts saw $3.33 million wiped out. This near parity in liquidation values across both sides highlights a potential increase in market volatility.
Funding rates currently sit at a negative -0.0222, indicating that short positions dominate the market, as those with bearish bets are paying to maintain their positions. With aggregated open interest at $2.34 billion—down from recent peaks—there’s evidence that traders may be reducing their leverage rather than establishing new positions, reinforcing a bearish stance.
Technical Indicators Unveil Continued Weakness
Technically, Solana is trading below both the 50-day and 200-day Exponential Moving Averages, establishing a clear bearish trend. Any hint of recovery is likely to encounter resistance at these levels, posing significant challenges for price advancement.
Analysis of the Moving Average Convergence Divergence (MACD) signal suggests bearish pressure may be waning, as the negative histogram appears to be contracting. Meanwhile, the Relative Strength Index (RSI) presently hovers at 29, placing SOL in oversold territory, which may suggest a potential for a bounce, albeit with overall momentum still lagging.
From a technical perspective, Solana remains trapped within a range defined by $84.60 and $89.14 as per Bollinger Bands analysis. Support levels are firmly established at $67, with a deeper support zone noted at $51, where previous bounces occurred. Key resistance levels rest at $111 and $138, with a decisive daily close above $111 necessary to paint a more favorable technical picture.
As of now, Solana is trading at approximately $87.77, leaving investors and traders alike to ponder the future trajectory of this cryptocurrency amid a landscape of volatility and institutional interest.
