Solana (SOL) Funding Rate Signals A Decline: Investors Expect $130
August 30 2024 - 10:00AM
NEWSBTC
Solana is now trading around a critical support level after
experiencing a 15% decline from its local highs at $162.36. While
Solana has shown relative strength compared to other altcoins, the
recent price action has introduced heightened volatility and
potential risks for investors. Related Reading: Solana Price
(SOL) Slips: Will a Break Below $140 Trigger More Downside? Fear
and uncertainty currently dominate the market, with key data from
Coinglass revealing a bearish sentiment among traders. This
sentiment shift reflects the broader market concerns as Solana
approaches this crucial support level. The coming days will
be pivotal in determining whether Solana can stabilize or face
additional downside pressure. Notably, some top investors are
waiting for a decline to the $130 area, a shy 7% drop from current
prices, as a potential entry point. Given the current market
environment, traders and investors are closely monitoring Solana’s
performance at this level to gauge its next move. If Solana holds
its ground, it could indicate resilience and potential for
recovery; however, a failure to maintain this support could lead to
further declines. Solana’s Funding Rate Turns Negative Solana’s
recent decline has turned traders bearish, at least in the short
term. Crucial data from Coinglass reveals that the funding rate for
SOL has turned negative for the first time since August 23. A
negative funding rate indicates that short positions now outweigh
long positions, meaning traders are paying to maintain their short
bets against SOL. This shift in sentiment suggests that traders are
increasingly expecting further declines in Solana’s price. Adding
to the bearish sentiment, several traders and analysts are
anticipating a drop towards key support levels. Top trader
AlienOvich on X shared an analysis suggesting that Solana could
fall further, targeting the $135-$128 area. If Solana fails to hold
its current levels, this bearish scenario could materialize,
bringing Solana closer to AlienOvich’s predicted range. Such a
decline would not only validate the bearish sentiment currently
driving the market but also challenge Solana’s ability to maintain
its recent gains. Related Reading: Chainlink (LINK) Could Drop To
$8 If It Loses Current Support: On-Chain Data Reveals The next few
days will be crucial for Solana as it tests these lower levels.
Traders will be closely watching to see if Solana can find support
or if the negative sentiment will push the price down further. As
the market reacts to this pressure, Solana’s ability to recover and
potentially bounce back will be key to determining its short-term
trajectory. Solana Price Action Solana (SOL) is currently
trading at $139.87, significantly below its daily 200 moving
average (MA) of $152.28, and is now testing the daily 200
exponential moving average (EMA) after briefly dipping below it.
The primary distinction between these two indicators is that an EMA
is a weighted average, giving more importance to recent data
points, while an MA treats all data points equally. For SOL to hold
this critical support level, it needs to reclaim the EMA and
consolidate around the $140 mark. Failing to do so could lead to a
further decline toward the lows seen on August 5. This price
level is crucial for determining whether SOL can maintain its
current uptrend or if it will continue to face downward pressure.
Traders are closely watching this level, as losing it might
indicate a deeper correction is imminent. Cover image from Dall-E,
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