Solana (SOL) is currently in a tough spot and is down 12% from its recent all-time high of $264.63. Currently trading at $232.72, SOL is facing negative factors that have created a pessimistic atmosphere in the market sentiment.
Investors are increasingly inclined to take short positions. Currently, short positions worth $6 billion have been opened, while long positions remain at $5.38 billion.
“SOL’s 20-day Exponential Moving Average (EMA) support at $226.52 is a critical level. If the price breaks below this level, a drop to $205.56 is possible,” a COINOTAG analyst said.
Solana has been drawing attention with its recent sharp decline, and investors are choosing to take short positions in opposition to the current rally. This situation reveals how important support levels are in market conditions.
After reaching a high of $264.63 on November 24, Solana has been facing increasing negative factors and is currently trading at $232.72. This marks a 12% drop and indicates a significant change in market sentiment. More investors are choosing to open short positions against the cryptocurrency. The increasing pessimism, combined with the general uncertainty in the crypto market, has led more investors to expect a decline.
According to Coinglass data, short volume on Solana has reached $6 billion in the last 24 hours, significantly outpacing long positions at $5.38 billion. This suggests a clear pessimistic sentiment among investors. Furthermore, Solana’s long/short ratio is at 0.96, suggesting that shorts outnumber longs and a lack of confidence in a price recovery.
Additionally, Solana’s weighted sentiment is also negative and is currently at -0.40. This metric is an indicator of the general mood of market participants, suggesting that social media discussions are largely negative and market excitement is waning. A negative weighted sentiment is considered a sign that trading activity and interest around the asset is starting to decline.
According to a daily chart analysis of Solana’s price action, SOL is currently approaching a critical level: support for the 20-day Exponential Moving Average (EMA). This indicator averages prices over the last 20 days, but gives more weight to recent price action and has provided a significant support level for SOL since October.
This $226.52 support level is a critical point that will determine whether the price can fall further. If SOL breaks below this level, the market could become even more pessimistic and prices could fall to $205.56. However, if this support level holds and the price recovers here, SOL could make a rally towards its previous high of $264.63.
