Solana's native cryptocurrency, SOL, has experienced a 15% price drop this week, occurring even as its associated Solana ETF funds have recorded seven consecutive sessions of strong inflows. The ETF products saw $29.2 million in trading volume over the last 24 hours, contributing to a total of $323 million in inflows.
Technically, SOL's price has reached a critical juncture after falling below the 23.6% Fibonacci retracement level, which was at $165.65. The cryptocurrency is now testing support around the $155 mark. This downward movement indicates a fading momentum, coinciding with increased investor caution, as reflected by the prevailing fear in the market's fear and greed index. This trend also mirrors a broader market sentiment where traders are shifting away from altcoins and favoring Bitcoin as a more secure asset during times of economic uncertainty.
Solana ETF Inflows Surpass $300 Million
Farside Investors reported consistent inflows into Solana ETF products for seven consecutive trading days, starting from October 28. Notably, Bitwise's BSOL US Solana ETF attracted $312.1 million in inflows during this period. This occurred while Bitcoin and Ethereum investment products experienced outflows.
Over the same timeframe, Bitcoin ETFs saw outflows totaling $1.1 billion, and Ethereum funds recorded outflows of $465 million. Analysts have highlighted the significant difference, especially considering the overall market conditions. Solana's new ETF products have continued to gain momentum, attracting consistent demand while more established funds faced steady redemptions.
SOL Price Declines 15% to Test Ascending Support
The price of Solana (SOL) is approaching a potentially pivotal moment on its charts, currently testing an ascending support line that has provided stability since midyear. This support zone, located around the mid-$150 range, has served as a reliable base during previous market corrections.
The Relative Strength Index (RSI) is showing early indications of bullish divergence. Despite the recent price drop in Solana, the RSI has recorded higher lows, suggesting that selling pressure may be diminishing and momentum could be starting to shift.
If this support level holds, Solana could be positioned for a rebound. A firm bounce from the current levels would validate this shift and potentially initiate a short-term recovery. However, a decisive break below this support could lead the price to the next key level, which is near $140. The market is closely watching to see if Solana can maintain its current position and transition from a declining trend to a potential upward movement.
The MACD histogram has turned negative, registering at –2.63, which reinforces a bearish outlook. The seven-day simple moving average, currently around $175.73, acts as immediate resistance and a crucial turning point for SOL's price action.
Future Outlook for Solana Price and ETF
Unless Solana manages to reclaim a price above $165, the prevailing momentum is likely to remain tilted downwards. A closing price below $155 would bring the next significant support level into play, situated near $146.75 – a price point that has previously acted as a floor. Buyers might emerge at this level, but a failure to hold it could accelerate the sell-off.
In parallel, cryptocurrency analyst CryptoBusy has identified a developing double-bottom pattern on the Solana chart, forming within the $146 to $150 range. This technical formation suggests a weakening bearish momentum and early signs of a potential price reversal.
The confirmation neckline for this pattern is positioned near $170. A clear break above this level could trigger the next upward price movement for SOL. The pattern is showing increasing strength, supported by rising trading volumes on recent price rebounds.