Solana Faces Continued Losses Amid Weak Institutional Demand
Solana (SOL), the sixth-largest cryptocurrency by market cap, has recently experienced a significant decline in its value. Over the past week, the token has dropped by 13%, marking its third consecutive week of losses. This bearish trend is alarming investors as key market indicators reveal decreasing demand from institutional players.
Declining Solana ETF Inflows Signify Weak Institutional Interest
Despite the recent launch of Solana-focused Exchange-Traded Funds (ETFs) in the United States, institutional inflows have hit their lowest levels. According to Sosovalue, last Thursday saw just $1.49 million of inflows, led by the Bitwise Solana Staking ETF. This minimal inflow points to reduced interest from institutional investors in the cryptocurrency market.
Market Indicators Signal Bearish Trends
Further compounding the negative momentum is data from CoinGlass, which reveals a 3.34% drop in Solana futures Open Interest (OI) over the last 24 hours, standing at $7.35 billion. Market sentiment also remains bearish, with the OI-weighted funding rate dropping to -0.0076%, indicating that traders are increasingly taking short positions.
Technically speaking, Solana’s daily charts present a bearish picture. After slipping below the $150 psychological resistance level earlier this week, SOL continues to face downward pressure. At the time of writing, SOL is trading at $138 and is edging closer to the $126 support level observed on June 22. A drop below this key level could take Solana further down to the $100 support line.
Technical Indicators Reflect Increased Selling Pressure
The Relative Strength Index (RSI) stands at 36, hovering closer to the oversold zone, suggesting growing selling pressure. Similarly, the Moving Average Convergence Divergence (MACD) indicator shows no sign of recovery as it remains below the signal line. However, a bounce back above the $126 level could potentially lead to a recovery aimed at the $155 resistance zone, with the next key level at $175 being a significant challenge for bulls.
How to Navigate Solana’s Volatility: Key Considerations
For long-term investors, Solana’s current dip may present an opportunity to accumulate at lower prices. However, given the bearish market sentiment and declining institutional interest, caution is advisable. Tracking key resistance and support levels, as well as monitoring broader market conditions, will be essential for those considering investment or trading options.
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Conclusion: Solana Faces Uncertain Times
The unfolding bearish trends in Solana’s market performance highlight challenges stemming from weaker institutional demand and broader crypto market conditions. Whether SOL can reclaim higher levels in the coming weeks depends on improved investor sentiment and technical indicators showing signs of recovery.
