Will Solana see extreme bullish reversal?
Solana (SOL) has been in a downward spiral over the past week. Since reaching a new all-time high of $264.63 on November 22, SOL has encountered a surge in selling pressure. This has caused its price to drop by almost 10% in the past seven days.
This decline has led to an uptick in long liquidations in the SOL futures market. With strengthening bearish sentiments, Solana long traders may face more losses. Here is why.
Over the past week, SOL’s 8% price drop has wiped out $64 million in long positions from its derivatives market.
This is a bearish signal for SOL because as Solana long traders attempt to avoid further losses to their investments, their selling pressure can increase and contribute to further downward movement in the market.
Notably, the decline in SOL’s price has led to a significant drop in activity in its derivatives market. This is reflected in the coin’s open interest, which currently rests at a weekly low of $3.34 billion.
Solana’s Awesome Oscillator confirms the uptick in bearish bias toward the coin. As SOL’s price records a decline over the past week, the indicator has returned red histogram bars.
If selling activity gains more momentum, SOL’s price will break below the crucial support level, formed at $231.54. A dip below this price point will send SOL’s price downward to $205.56.
On the other hand, if buying pressure gains momentum, SOL’s price will climb toward its all-time high of $264.63.
