What Do Derivatives Indicate?
Currently, derivatives data paints a picture of prudence among traders. Specifically, CoinGlass reports a dip in Solana’s long-to-short ratio to 0.94, indicating a predominance of short positions and reflecting a bearish market sentiment. This shift signifies traders’ anticipation of further price declines, marked by the negative funding rate that suggests short holders are compensating their long counterparts.
Solana’s funding rate decreasing to minus 0.0080% emphasizes the bearish inclination among investors. Historically emerging when price drops are expected, this trend illustrates the prevalent apprehension dictating the current market dynamics.
Can Technical Indicators Overcome Resistance?
The cryptocurrency’s technical landscape presents formidable resistance levels. Initial resistance emerges at $74.75, followed closely by the 50-day exponential moving average pegged at $76.18. In pursuit of a genuine recovery, the 50% Fibonacci retracement level at $79.27 and the 100-day EMA at $83.03 pose further challenges. Despite reaching these milestones, Solana’s momentum remains constricted by a lackluster MACD indicator and an RSI below the pivotal 50 mark.
The monthly chart unveils pronounced weaknesses, with Solana enduring eight consecutive months of decline—a record streak. Its RSI sits at one of the lowest levels, reflecting an oversold market condition reminiscent of the 2022 FTX collapse.
- Eight-month consecutive decline represents an unprecedented losing streak for Solana.
- The negative funding rate indicates traders are predominantly positioning for further downturns.
- Institutional inflows, albeit modest, signal lingering interest despite the bearish outlook.
Signs of hope persist as institutional figures maintain interest, with spot Solana ETFs witnessing inflows. Some traders identify the $50–$40 range as a possible accumulation zone. Holding above $62–$63 is vital for underpinning current levels, while potential upward targets lie at $68, $70, and $76 if a bullish momentum materializes.
Continue Reading: Solana Struggles to Break Key Levels Amid Sustained Market Pressure
Disclaimer: The market is risky, and investment needs to be cautious. This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article are in line with their specific circumstances. Investment based on this is at their own risk.