- Solana’s rally weakened after the price failed to breach the $161 resistance level.
- However, rising open interest and positive funding rates suggest overall bullish sentiment.
Solana (SOL) was trading at $157 at press time, a gain of over 7% over the past seven days. SOL staged a bold rally this month alongside the broader cryptocurrency market, with 30-day gains of 14%.
Data from CoinMarketCap showed that in the last 24 hours, Solana’s trading volumes increased by more than 45%. However, the red bars in the volume histogram on the daily chart indicated selling activity.
Additionally, the Moving Average Convergence Divergence (MACD) indicator hinted at a possible bearish divergence as the MACD histogram bars faded and narrowed while the MACD line flattened.
This shows that the bullish momentum is weakening.
Source: TradingView
The Chaikin Money Flow (CMF) indicator also proved the case for a weakening uptrend, as it was now leaning south.
This shows that sellers have entered the market, with the move coinciding with SOL’s failure to overcome resistance at $161. However, the positive CMF indicator showed that buyers are still active.
If sellers overwhelm buyers and CMF turns negative, SOL could fall to test support at the 0.786 Fibonacci level ($153). This level previously acted as strong resistance.
Solana Open Interest Approaches High Level
A look at the futures market shows traders are adding to their positions in Solana, as Open Interest has climbed to $2.71 million at the time of publication by Coinglass.
Solana’s open interest was at its highest level since early August.
Source: Coinglass
An increase in open interest shows that market participants are opening margin positions on Solana and maintaining existing ones.
Furthermore, an examination of funding rates, which have been mostly positive for the past two weeks, shows that these participants likely opened long positions in anticipation of further price increases.
This suggests strong bullish sentiment around Solana.
However, an increase in long positions while the price stagnates or fails to see a significant rise could signal overleveraging.
TThis could result in a strong downtrend if these long traders choose to exit their positions.
dApp volumes skyrocket
The Solana network has seen an increase in activity. Data from DappRadar showed that the seven-day average of decentralized application (dApp) volumes on Solana increased by 48% to $771 million.
At the same time, dApp transactions climbed 20% to 97 million, while Unique Active Wallets (UAW) increased 15% to 19 million.
Source: DappRadar
Read Solana (SOL) Price Prediction 2024-2025
Although such growth in dApp volumes is often considered bullish due to speculation about increasing utility, sentiment around Solana remains negative.
Data from Market Prophit showed that crowd and smart money sentiment is bearish on Solana, suggesting that market participants were expecting the price to fall further.
Source: Market Prophet
