Solana (SOL) has been grappling with a sustained decline in value, largely driven by ongoing market pessimism and a surprising lack of confidence among institutional investors. This downturn persisted even after Brazil approved another Solana ETF, a development that was initially expected to bolster the cryptocurrency’s price.

Institutional Investors Withdraw from Solana

The recent approval of a second spot Solana ETF in Brazil had the potential to initiate a price recovery, potentially setting a positive precedent for altcoins globally. However, instead of benefiting from this development, Solana has seen a significant withdrawal of institutional investment, raising concerns about its near-term performance.

According to a report from CoinShares, Solana experienced outflows amounting to $38.9 million in the week ending August 17. This brings the total outflows for Solana in 2024 to just $31 million, a figure that is even lower than that of Litecoin. This pullback from institutional investors has contributed to Solana’s underperformance, especially when compared to leading cryptocurrencies like Bitcoin and Ethereum.

This retreat by large investors has amplified the already negative sentiment in the broader altcoin market. The Relative Strength Index (RSI) briefly moved into bullish territory but has since fallen back below the neutral line, indicating weakening buying momentum. As long as the RSI remains subdued, the likelihood of a robust recovery for Solana seems limited.

SOL Price Forecast: A Conservative Perspective

Currently, Solana is trading around $142, precariously close to its $137 support level. Earlier this month, SOL managed a short-lived recovery from $130 to $162, but this momentum appears to be fading. It’s likely that Solana will continue to consolidate below the $156 mark, as it has in the past.

If Solana fails to hold the $137 support level, it could potentially drop to $126, a critical support zone. A rebound from this level could reaffirm Solana's trading range between $126 and $186. However, for a more optimistic outlook, Solana would need to reclaim the $156 level and gradually recover, potentially reaching $169. Although SOL may not fully recover from its recent 30% decline, a rally to $169 could challenge the prevailing bearish sentiment.

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