Solana experienced a significant drop below critical support levels, with investor sentiment waning, as it faces challenges in regaining stability.
- The SOL RSI showed it was now below 40. SOL declined by over 22% in the last seven days.
Recent data indicates that Solana [SOL] was hit particularly hard during a week of significant downtrends in the crypto market. The open interest in Solana has experienced consecutive declines, reflecting heightened negative sentiment among investors.
Solana sees a double-digit decline
According to data from CoinMarketCap, Solana experienced the largest decline among the top ten crypto assets in the past seven days, with a drop of over 22%.
The only other asset with a comparable decline was Dogecoin, which fell by 18% over the same period.
Further analysis indicates that Solana is among the top losers of the past week. As of the latest data, SOL’s trading volume is approximately $3.3 billion, but it has decreased by over 20% in the last 24 hours.
How Solana has trended
An analysis of Solana (SOL) on a daily time frame revealed a consistent downtrend, with it declining for six consecutive days, each decline steeper than the last.
According to AMBCrypto, this downtrend began on 29th July with a 1.29% decline. This decline dropped the price from approximately $184 to $182.
The most significant drop occurred on 2nd August, with an 8.76% decline, pushing the price from around $167 to $152. This decline caused SOL to fall below its short-moving average (yellow line), which had been a support level.
Source: TradingView
On 3rd August, SOL experienced another substantial drop of 6.6%, bringing its price down to around $142. This move pushed the price below its long-moving average (blue line), which served as another support level.
As of this writing, Solana was trading at approximately $142. The previous support levels, indicated by the yellow and blue moving average lines, have now become resistance levels.
Interest in SOL wanes
Analysis of Solana’s open interest on Coinglass revealed a significant decline over the past few days. On 31st July, the open interest was approximately $3 billion, but it has since dropped to around $2.2 billion.
This decline indicates a reduction in cash inflow into Solana, reflecting decreasing investor interest and possibly growing negative sentiment.
Additionally, an analysis of Solana’s funding rate showed it had fallen below zero. This indicates that sellers were dominating the trade and that short positions were prevalent.
Source: Coinglass
However, as of this writing, the funding rate has spiked back into positive territory, now at around 0.0051%. This change could indicate a shift in market sentiment, with a potential move away from predominantly short positions.
The positive funding rate suggests that there may be renewed buying interest, which could help stabilize Solana’s price in the near term.
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