Solana (SOL) continued its downward trajectory on Friday, slipping below the psychologically significant $90 mark to trade near $89.65, its lowest level in two months. The token has now posted losses for six consecutive weeks, reflecting persistent bearish sentiment across the cryptocurrency market.
The latest drop was exacerbated by a broad crypto selloff that triggered over $1 billion in liquidations across the market. Solana itself saw approximately $43.85 million in futures positions liquidated on Thursday, with long positions accounting for nearly 92% of that total, according to CoinGlass.
ETF Outflows Signal Waning Institutional Interest
Institutional demand for Solana has weakened, as evidenced by fresh outflows from US-listed Solana-focused exchange-traded funds (ETFs). SoSoValue data shows these products recorded $1.18 million in net outflows on Thursday, ending a three-day streak of no reported net flows. This follows last week's record weekly outflow of $71.47 million, the largest since these ETFs launched.
Persistent outflows suggest that institutional investors are reducing their exposure to Solana, potentially removing a key source of buying pressure. The trend aligns with a broader risk-off sentiment in financial markets, as investors shy away from volatile assets.
Derivatives Data Points to Weakening Confidence
Derivatives market indicators also reflect deteriorating sentiment. Solana futures open interest (OI) fell to $5.38 billion on Friday, down 8% in the last 24 hours, according to CoinGlass. A decline in OI typically indicates that traders are closing positions or reducing their market exposure, which can exacerbate price declines.
Thursday's sharp selloff led to significant long liquidations, with $40.21 million in long positions wiped out, representing nearly 92% of total liquidations. This suggests that leveraged bullish traders were caught off guard, and their forced selling may have accelerated the downward move.
Technical Indicators Turn Bearish
Solana's technical setup has turned increasingly bearish. The token is trading below its 200-day exponential moving average (EMA), currently near $99.62, and the 50-day EMA is approaching the 200-day EMA. If the shorter-term average crosses below the longer-term one, it would form a 'death cross,' a pattern often interpreted as confirmation of weakening momentum.
SOL is currently testing a long-term ascending support trendline that connects the lows from June 6 and June 25. This trendline is positioned around $89.83, placing the token at a critical juncture. A sustained break below this support could open the door to the horizontal level at $87.21, and a decisive close below that could accelerate losses toward $70.58, a level last seen on August 1.
Momentum indicators reinforce the negative outlook. The daily relative strength index (RSI) stands at 31, just above the oversold threshold of 30, while the moving average convergence divergence (MACD) remains below its signal line in negative territory. These readings suggest that bearish momentum is still dominant, and buyers have yet to show convincing strength.
Potential Recovery Scenarios
Despite the bearish signals, a recovery is possible if buyers defend the ascending trendline. An initial rebound would need to establish support above the $89–$90 region. The next major resistance lies at the 200-day EMA around $99.62, just below the psychological $100 mark. A sustained move above that level could improve short-term sentiment and bring the 50-day EMA at $101.92 into focus.
Reclaiming both moving averages would represent a meaningful improvement in Solana's technical structure. However, until such a recovery materializes, the path of least resistance appears to be lower, with key support levels at $87.21 and $70.58 in focus.
This article is for informational purposes only and does not constitute financial advice.
