Over the past six weeks, Solana has registered a massive fall from the all-time high of $295. Solana has plunged to $139, marking a significant drop of more than 50%.
With a low price rejection from a 24-hour low at $131, Solana struggles to sustain dominance above its 100-week EMA. Will the increased selling pressure and the broader market crash plunge Solana to $85?
Solana’s Weekly Price Action: More Downside Ahead?
In the weekly price chart, Solana has formed six consecutive bearish candles. With the downfall, Solana is trading at a market value of $139.5.
The MACD and signal lines have given a negative crossover, accompanied by a surge of bearish histograms. However, the 20, 50, and 100 EMA lines in the weekly chart maintain a positive alignment.
The 100-week EMA line is supporting the ongoing downfall and projects a potential turnaround with the lower price rejection. However, the increased selling pressure in the market warns of a breakdown rally.
Based on price action analysis, Solana is headed to test the immediate support near $128. If Solana finds a closing price under this support level, the downfall is likely to hit the $85 support mark.
On the bullish front, sustenance above the 100-week EMA line will test the 50-week EMA at $167.
FTX Token Unlock: Will SOL Hit $100?
Despite the minor lower price rejection, the upcoming token unlock in the Solana network is likely to plunge the market price. As per the Solana portal, the network will witness a massive unlock of 11.16 million SOL tokens worth $1.56 billion.
The unlock will come from the FTX exchange, following its bankruptcy in 2022. The massive token unlock, worth $1.56 billion, is likely to spike supply pressure, resulting in a quick plunge.
Solana Derivatives Data Signals Increased Volatility
Amid the massive crash, the Solana derivatives data analysis reveals increased volatility. The open interest is down by 13% to $4.54 billion, while the short-term surge in funding rate has reached 0.0041%.
However, the long liquidation has reached $100 million, with short liquidation rising to $11.5 million. The long-to-short ratio, reflecting the number of bullish and bearish positions in the market, signals minor bearish dominance.
The ratio stands at 0.9399, reflecting increased bearish positions. However, on the top exchanges like Binance and OKX, the ratio is extremely bullish, highlighting almost 3 to 4 times more bullish positions at play.