The crypto market faced a collapse, intensifying selling pressure on Solana (SOL) as trader and investor sentiment grew increasingly bearish.
As part of this sell-off, SOL was hit the hardest. It lost a key support level at $118, which it had successfully defended since March 2024.
To add to the bearish outlook, a newly created wallet deposited 2 million USDC on the Hyperliquid DEX and opened several short positions. This reflects the current market outlook, according to crypto tracker Onchain Lens.
A deeper analysis of the whale’s activity shows that it opened a huge SOL short position worth $6.15 million at the $122.91 level.
This sale is not limited to the crypto market alone; this has also been observed on Wall Street.
According to on-chain analytics platform SoSoValue, US-based Solana spot exchange-traded funds (ETFs) saw a significant outflow of $2.22 million. This suggests that investors and institutions are withdrawing capital from the underlying asset.
Source: SoSoValue
Both developments highlight market sentiment towards Solana, and their impact is reflected in the asset’s price.
Solana Price Action and Key Levels
At press time, SOL plunged 6.65% in the past 24 hours and was trading near $115.
Despite the price decline, market participation increased significantly, with SOL’s trading volume jumping 105% to $7.60 billion during the same period. This indicates strong interest from traders and investors, leading to high participation in the market.
Looking at the price charts, it appears that SOL has lost one of its strongest key support levels, at $118, which it had held since March 2024.
On the weekly chart, the asset had already bounced more than ten times from this support, but SOL has now failed to maintain it.
Source: TradingView
On the daily chart, price action suggests that SOL could see a sharp decline, potentially falling by 30% and reaching the $78 level in the coming days.
However, this outlook would only be validated if the asset stays below or closes a daily candle below the $118 level.
Source: TradingView
Technical indicators, including the 50-day exponential moving average (EMA) and average directional index (ADX), support SOL’s bearish outlook.
Notably, SOL was trading below 50 EMA, indicating that the asset is bearish in the near term.
Meanwhile, the ADX, which measures the strength of the current trend, rose to 33, above the key threshold of 25, suggesting that SOL is experiencing a strong directional trend.
Traders Consider Leveraged Short Positions
From a derivatives perspective, traders appear heavily positioned on the bear side.
According to CoinGlass data, intraday traders are closely watching two critical price levels. On the downside, the focus is on $112.8, while on the upside, the focus is on $120.2.
At these levels, traders have established significant leveraged positions. The short leveraged positions total $55.15 million, while the long leveraged positions are much larger, amounting to $241 million.
This positioning highlights the current market tension, with traders bracing for sharp moves in either direction.
Source: CoinGlass
This positioning clearly reflects how intraday traders view SOL right now.
Final Thoughts
- The bearish activity of market participants reinforced the negative outlook for Solana.
- The price action suggests that another 30% decline in SOL could be on the cards if the asset remains below the $118 level.
