Solana (SOL) continues to face selling pressure, trading near $69.58 after declining more than 5% this week. Weakening derivatives data and a deteriorating technical structure suggest sellers remain in control, raising the possibility of a deeper correction toward the $60 support level.
Derivatives Signal Growing Bearish Sentiment
Recent derivatives metrics point to increased pessimism among traders. According to CoinGlass, Solana's long-to-short ratio fell to 0.94 on Wednesday, approaching its lowest level in over a month. A reading below one indicates that short positions now outnumber long positions, signaling that traders are increasingly positioning for further downside.
Adding to the bearish outlook, Solana's perpetual futures funding rates turned negative earlier this week. The funding rate stood at -0.0080% on Wednesday, meaning short holders are paying longs. Negative funding rates are typically interpreted as a sign that market participants expect prices to continue declining.
Institutional Demand Offers Modest Support
Despite the bearish derivatives backdrop, some indicators point to underlying demand. Data from SoSoValue shows that spot Solana ETFs recorded net inflows of $137,290 on Tuesday. While modest, the inflow suggests institutional interest remains present. If ETF demand continues to build, it could provide support for SOL and help offset broader market weakness.
This dynamic mirrors patterns seen in other digital assets, such as XRP, which faces a $1.05 support test as bearish signals outweigh $2.4M ETF inflows.
Technical Picture Remains Bearish
The SOL/USD 4-hour chart continues to exhibit a bearish structure. SOL remains firmly below its 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), which collectively form a significant resistance zone. As long as the price stays below these key trend indicators, the broader outlook is likely to remain under pressure.
Technical momentum indicators also point to caution. The Moving Average Convergence Divergence (MACD) remains in positive territory but has begun to flatten, signaling that bullish momentum is fading. Meanwhile, the Relative Strength Index (RSI) sits near 46, below the neutral 50 level, suggesting buyers currently lack the momentum needed to challenge overhead resistance.
Key Levels to Watch
- Support: $69.17 — a decisive break below this level could trigger additional selling pressure and expose the next major support zone around $60.13.
- Resistance: $74.75, followed by the 50-day EMA near $76.18. A stronger breakout could target the 50% Fibonacci retracement at $79.27 and the 100-day EMA at $83.03.
If Solana manages to rebound, it would need to reclaim the 50-day EMA to shift the near-term outlook. However, with bearish derivatives positioning intensifying and technical indicators remaining weak, traders will likely be watching the $69.17 support closely to determine whether SOL can stabilize or face a deeper correction.
For context, Ethereum faces a critical $1,611 support test as its selloff accelerates, highlighting broader weakness across major cryptocurrencies.
This article is for informational purposes only and does not constitute financial advice.
