Solana (SOL) has been trading at the lower boundary of its ascending channel since the beginning of the month. The decline towards the support line began on May 20. SOL’s movement within the ascending channel has continued since it started its uptrend on April 30. On the specified date, the altcoin was trading at $129. As of May 20, its value rose to $184, followed by selling activities.
Expectations of Decline in SOL
The cryptocurrency’s price fell last week, and it is now preparing to drop below the 20-day exponential moving average. This moving average reflects SOL’s average price over the past 20 days. When a token’s price falls below this fundamental moving average, it can signal that the short-term trend may be shifting from bullish to bearish.
This is because the 20-day EMA acts as a support line, and a break below it may indicate that sellers have outpaced buyers. SOL’s moving average convergence divergence (MACD) data, which confirms the market trend shift from bullish to bearish, may show the MACD line crossing the signal line in a downtrend. This situation could indicate a momentum shift towards a bearish trend. Market participants often see this as a sign to exit long positions and take short positions.
Futures Trading in Solana
Since May 20, SOL has witnessed a decline in open positions in the futures market. At the time of writing, this figure stands at $2.44 billion, a 4% decrease over the past seven days. SOL futures open positions track the total number of open or unsettled futures contracts or positions. Such a decline may indicate that market participants are increasingly exiting trading positions without opening new ones.
According to experts, if the popular altcoin SOL breaches the $163 support, its price could further drop to $157.99. However, due to the positive funding rate on cryptocurrency exchanges, futures investors are still taking long positions in SOL. This could lead to an increase in buying pressure, pushing the asset’s price towards $172.41.
