Solana
Will Solana’s rally continue despite the drop below $180?
Despite the recent price decline, SOL’s positive funding rate suggests that long traders dominate its futures market.
- SOL’s brief rally past its resistance on 20th May was short-lived.
- Although its price has declined in the past few days, SOL accumulation continues to climb.
Solana’s [SOL] rally above its short-term resistance level of $185 on the 20th of May was cut short by selling pressure, which has pushed the coin’s price below $180.
After the altcoin’s price climbed to a one-month high of $187.83 on 21st May, it initiated a downtrend and has since fallen by 6%. According to CoinMarketCap’s data, as of this writing, SOL exchanged hands at $177.
SOL bears are on the move
As expected, the decline in SOL’s price in the past few days has resulted in a decrease in its daily trading volume. At $3.74 billion as of this writing, the altcoin’s daily trading volume has dropped by 20% since the $5 billion high recorded on 21st May.
As selling pressure gained momentum, the coin’s weighted sentiment shifted from positive to negative, confirming the change in market sentiment from bullish to bearish. According to Santiment’s data, SOL’s weighted sentiment was -0.13 as of this writing.
Source: Santiment
When an asset’s weighted sentiment is negative, there is significantly more negative social media buzz surrounding it than positive discussions.
Due to this price drop, the coin’s futures market has seen more long positions liquidated than short ones over the past two days.
According to Coinglass’ data, between the 21st and 22nd of May, $13 million worth of long positions were liquidated. In contrast, only $5 million worth of short positions were wiped off the market during the same period.
Source: Coinglass
Also, during that period, SOL’s futures open interest cratered by 10%. This showed that traders exited their positions without opening new ones due to the coin’s price decline.
The bulls remain steadfast
However, despite SOL’s price action in the past few days, its funding rate has continued to be positive. At press time, SOL’s weighted funding rate was 0.0159%.
When an asset’s futures funding rate is positive, it suggests a strong demand for long positions. This means that despite SOL’s current decline, more traders are buying the coin and expecting a rally.
Read Solana’s [SOL] Price Prediction 2024-25
The surge in SOL’s accumulation was gleaned from its rising Relative Strength Index (RSI) at press time.
Source: SOL/USDT on TradingView
At 61.94, SOL’s RSI suggested that its spot market participants preferred accumulating more coins than selling.
