In recent weeks, SOL rose to $210 but then experienced a sharp decline, and for approximately two weeks now, it has been attempting to surpass the $200 level without success. This situation likely had a negative impact on the bullish outlook among investors and could potentially lead to further price declines.
Are Solana Investors Anxious?
As of writing, Solana‘s price is at $190 and continues to struggle to break the $200 resistance level. The inability to surpass $200, as indicated by the decline in Open Interest (OI), also reflects a decrease in investor optimism.
Within a two-day period, OI fell from $3.14 billion to $2.88 billion, marking a 15% decrease. This situation could suggest that traders are hesitant to open positive positions on SOL considering the current consolidation period.
On the other hand, the declining funding rate also indicates that traders are becoming increasingly reluctant to open bullish positions.
To briefly mention the funding rate, it can be described as a notable tool used in perpetual futures contracts, especially in cryptocurrency and other financial areas, designed to keep the price of the perpetual contract close to the spot price of the mentioned asset.
This metric experienced a decline within the 48 hours following unsuccessful attempts to break the $200 resistance. Looking at the funding rate, it is not incorrect to say that it reflects the downward trend in the market, as it points to one of the lowest levels in the last two months and approaches the negative territory.
Consequently, without a revival in both Open Interest and the funding rate, investors may see Solana’s price entering a downward trend.
What Will Be the SOL Price?
Currently, Solana is trading at $190 and bulls are striving to reclaim the 50-day Exponential Moving Average (EMA) as support by holding above the $181 support level. However, even if another attempt to break the $200 level occurs, SOL could potentially drop to $168.
This suggests that SOL is in a consolidation phase between $168 and $200 and is likely to continue moving sideways.
Despite all these challenges, Solana continues to enjoy the advantages of being one of the preferred cryptocurrencies among institutions. According to a report published by CoinShares related to institutional net flow, Solana attracted approximately $25 million last month, surpassing all other altcoins, including Ethereum, which was referred to as the “killer” in the report.
