- Solana’s (SOL) recent price decline has not deterred long traders in its futures market.
- Despite the price drop, SOL accumulation continues to rise.
- Market sentiment has shifted from bullish to bearish, but long traders remain optimistic.
Solana’s (SOL) futures market remains dominated by long traders despite recent price declines.
SOL’s Brief Rally and Subsequent Decline
Solana’s (SOL) rally above its short-term resistance level of $185 on May 20th was short-lived as selling pressure pushed the coin’s price below $180. After reaching a one-month high of $187.83 on May 21st, SOL initiated a downtrend, falling by 6%. As of this writing, SOL is trading at $177 according to CoinMarketCap data.
Market Sentiment Turns Bearish
The decline in SOL’s price has led to a decrease in its daily trading volume, which currently stands at $3.74 billion, a 20% drop from the $5 billion high recorded on May 21st. This selling pressure has shifted SOL’s weighted sentiment from positive to negative, with Santiment data showing a weighted sentiment of -0.13. A negative weighted sentiment indicates more negative social media buzz than positive discussions.
Due to the price drop, SOL’s futures market has seen more long positions liquidated than short ones over the past two days. According to Coinglass data, between May 21st and 22nd, $13 million worth of long positions were liquidated, compared to $5 million worth of short positions. Additionally, SOL’s futures open interest has decreased by 10%, indicating that traders are exiting their positions without opening new ones.
The Bulls Remain Steadfast
Despite SOL’s recent price action, its funding rate remains positive at 0.0159%. A positive futures funding rate suggests strong demand for long positions, indicating that traders are still buying SOL and expecting a rally. The surge in SOL accumulation is also reflected in its rising Relative Strength Index (RSI), which currently stands at 61.94, suggesting that spot market participants prefer accumulating more coins than selling.
Conclusion
In summary, while Solana’s (SOL) price has experienced a decline, the futures market remains dominated by long traders, and accumulation continues to rise. Market sentiment has shifted to bearish, but the positive funding rate and rising RSI indicate that traders are still optimistic about SOL’s future performance. Investors should keep an eye on these metrics to gauge the potential for a future rally.
