Solana (SOL) has faced increasing selling pressure since hitting an all-time high of $264.63 on Nov. 24. Trading at $232.72 at the time of writing, the coin’s value has fallen by 12%.
As bullish sentiment in the cryptocurrency market weakened, this downward trend triggered an increase in short positions, with traders betting on a deeper drop in the SOL price.
Solana Price Falls as Futures Traders Bet Against the Rally
According to Coinglass, the total value of Solana short positions reached $6 billion in the past 24 hours, significantly outnumbering long positions at $5.38 billion. This indicates a strong bearish sentiment among traders.
Currently, SOL's long/short ratio stands at 0.96. This metric measures the ratio of open long positions (bets on price increases) to short positions (bets on price decreases) in a given asset.
SOL Long/Short Ratio. Source: Coinglass
When the ratio is below 1, it indicates that there are more short positions than long positions, suggesting that more traders are betting on a price decline than those anticipating an increase.
Furthermore, SOL’s negative weighted sentiment confirms the bearish bias towards it. At the time of writing this analysis, the indicator is at -0.40.
SOL Weighted Sentiment. Source: Santiment
An asset’s weighted sentiment metric tracks the overall market sentiment towards it. When an asset’s weighted sentiment value is negative, most of the discussions on social media are fueled by negative emotions. This indicates that market participants expect the price to fall and have gradually reduced their trading activity to avoid losses.
SOL price prediction: 20-day EMA is key
On the daily chart, SOL price is about to fall below its 20-day Exponential Moving Average (EMA). This indicator tracks the average price of the asset over 20 days, giving more weight to recent prices.
Since October 11, it has consistently served as a dynamic support level for SOL. Currently, the 20-day EMA provides support at $226.52, and a decisive break below this level would confirm the shift to bearish momentum. If this happens, SOL’s price decline could reach $205.56.
SOL Price Analysis. Source: TradingView
On the other hand, if market sentiment becomes more optimistic, SOL price could rise towards its all-time high of $264.63.
The article Solana (SOL) Drops 12% as Traders Bet on Further Declines appeared first on BeInCrypto.
