Solana: Deciphering what’s behind the weekend turmoil
- SOL declined by over 6%, and the funding rate hit -0.04%.
- Roughly $650 million worth of SOL could be liquidated by FTX if its motion is upheld.
Solana [SOL] recently experienced a notable downturn in several key metrics, marking the first time such negative trends have emerged in months. What might be driving this decline in SOL’s vital indicators over the weekend?
Read Solana (SOL) Price Prediction 2023-24
SOL price dips to months low
A glance at Solana’s daily timeframe chart revealed a less-than-ideal weekend performance. On 10 September, SOL experienced a significant decline, closing the trading day at $18.24, marking a 6.17% drop.
Notably, this decline exceeded 6%, a feat not observed in over two months. The last instance occurred in June when SOL saw a decline of over 10%.
As of this writing, SOL was trading at around $18.3, showing a modest 0.7% increase in price. However, this uptick did not alter the prevailing bearish trend, as evidenced by the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD). The RSI was sitting below 30 and approaching the oversold zone, while the MACD was trending below zero.
Additionally, SOL encountered resistance from its long-term and short-term Moving Averages, approximately at $21 and $22, respectively.
Solana funding rate dips
Solana’s weekend performance didn’t just affect its price; the funding rate was also significantly impacted. According to data from Coinglass, SOL registered its highest negative funding rate in over two months on 10 September, standing at -0.04%.
A slight change was noted as of this writing, with the funding rate hovering around -0.03%. The last time such a negative funding rate was observed was around June when the price declined by over 10%.
Also, the negative funding rate indicated that traders anticipated a price decline for SOL. What might have motivated traders to take this bearish position against SOL remains an intriguing question.
Possible reasons for Solana’s negative moves
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According to reports, a crucial ruling is anticipated on 13 September regarding FTX’s request to convert its cryptocurrency assets to settle its outstanding debts. These reports suggested that approximately $650 million worth of SOL could be liquidated if the ruling favors the defunct exchange.
Consequently, this impending legal decision has sparked speculation surrounding SOL’s future trends, significantly influencing its price movements.