- Solana (SOL) fell below $100 as both retail and institutional demand weakened, despite record on-chain activity.
- Technical indicators and market sentiment suggest further downside risk toward $85.
Solana (SOL) slipped below $100 on Wednesday following a more than 6% drop the previous day, reflecting weakening sentiment in the broader cryptocurrency market. Despite strong on-chain activity, both retail and institutional demand for SOL remain low, signaling further downside risk.
Fading Institutional Demand Amid Record On-Chain Activity
On-chain activity for Solana remains Strong, with Blockworks reporting a record 150 million daily transactions on Tuesday, translating to 1,743 transactions per second (TPS). This highlights that user engagement on the network is at an all-time high, even as price action turns bearish.
However, institutional inflows have been modest over the last three weeks, averaging under $9 million per day. U.S.-focused SOL ETFs recorded inflows of $1.24 million on Tuesday, building on Monday’s $5.58 million, but this remains insufficient to offset broader market weakness.
Derivatives Market Shows Bearish Bias
SOL’s derivatives market reflects growing bearish sentiment. CoinGlass data shows SOL Open Interest (OI) declined 1.24% over 24 hours to $6.37 billion, indicating capital withdrawal via position closures or reduced leverage. Long liquidations of $22.31 million far exceeded short liquidations of $4.39 million, confirming trader bias toward selling.
The OI-weighted funding rate dropped to -0.0238%, showing that traders are willing to pay to maintain short positions. Overall, $735 million in crypto liquidations occurred over 24 hours, including $529 million in long positions, pointing to intensified risk-off behavior.
Technical Outlook Points to $85
Technically, SOL trades below its 50-, 100-, and 200-day EMAs at $127, $139, and $153, maintaining a bearish structure. The MACD is in negative territory, and the Relative Strength Index (RSI) sits at 28 in oversold conditions, suggesting the potential for continued decline.
If Solana falls below $95, the next target is the S1 Pivot Point at $85. On the upside, a recovery above $100 could set sights on the 50-day EMA at $127, though sustained buying is necessary to change the bearish outlook.
With market sentiment showing no immediate signs of improvement, Solana traders face a challenging environment as bears remain firmly in control.
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