Whale transfer sparks bearish concerns amid bullish Solana ETF approval and market confidence. Read CoinChapter.com on Google News
NOIDA (CoinChapter.com)— The price of Solana (SOL) seems to be at a critical juncture, as recent market activity presents both bearish and bullish signals. A significant transfer of SOL tokens to Coinbase, and a bearish setup could lead to concerns of potential selling pressure.
At the same time, market confidence remains buoyed by positive funding rates, rising open interest, and the approval of the world’s first Solana spot ETF in Brazil. These contrasting developments make the near-term outlook for Solana both intriguing and uncertain.
Bearish Signals: The Large Transfer And The Pattern
A recent transaction raised eyebrows in the Solana community. On Aug. 9, a whale transferred 200,345 SOL, worth over $31 million, to Coinbase from an unknown wallet. Market participants often consider such large transfers to exchanges as precursors to sell-offs.
Whale investors typically move assets to platforms like Coinbase to liquidate their holdings. If this SOL is indeed sold, it could introduce significant downward pressure on the price, especially considering the size of the transaction relative to Solana’s daily trading volume.
A whale transferred over 200,000 SOL tokens to Coinbase.
The transfer’s timing exacerbates the bearish sentiment, as it coincides with a period of heightened volatility in the broader cryptocurrency market.
Multiplying the bearish pressure was the SOL USD pair forming the ‘descending triangle,’ a bearish technical setup.
Analysts recognize the descending triangle as a bearish continuation pattern. The configuration features a declining upper trendline that compresses price action into lower highs, while a flat lower trendline serves as consistent but weakening support.
SOLUSD pair formed a bearish setup with a 51% downside target. Source: Tradinview
The pattern signals intensifying selling pressure, resulting in progressively weaker rallies that struggle to breach resistance.
In this setup, traders estimate the potential downside by measuring the maximum height of the triangle. Toncoin’s price recently broke out of this descending triangle, only for bulls to temporarily push it back within the pattern. However, if the Solana token confirms the bearish setup, the SOL/USD pair could plummet by over 51%, reaching a target near $3.52.
A breakout below the pattern in the current market climate could be catastrophic for SOL, potentially resulting in significant losses for the trading pair. If the SOL rally fails, bulls will likely attempt to consolidate above the pattern’s support level to mount a defense.
Solana Bullish Indicators: Market Confidence and ETF Approval
Despite the bearish implications of the Coinbase transfer, Solana’s market fundamentals continue to show strength.
Solana OI-weighted funding rate. Source: Coinglass
The funding rate, a key indicator of market sentiment in futures trading, has largely remained positive over the past few weeks. This suggests that long positions are still dominant, reflecting a bullish outlook among futures traders.
Moreover, the funding rate briefly dipped into negative territory but quickly rebounded, indicating that traders quickly dismissed any bearish sentiment.
Solana futures open interest.
Additionally, open interest in Solana futures has been on an upward trajectory, signaling growing participation in the market. Rising open interest alongside price increases typically points to the entry of new capital, suggesting that investors are positioning for further gains in Solana’s price.
Adding to this positive momentum is the recent approval by the Brazilian Securities and Exchange Commission (CVM) of the world’s first Solana spot ETF. Set to launch within the next 90 days, this ETF, developed in partnership with CME Group, will use the CME CF Solana Dollar Reference Rate as its benchmark.
Tweet about Solana ETF.
The approval is a significant milestone for Solana, as it not only legitimizes the asset in the eyes of institutional investors but also opens the door for greater capital inflows from the traditional finance sector.
Brazil’s approval of the ETF aligns with a global trend where regulators propose similar products, achieving varying degrees of success. Brazil’s initiative could help the cause of Solana ETFs globally.
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