Amid the current bearish market sentiment, SOL, the native token of the Solana blockchain, has been attracting attention from crypto enthusiasts due to its recent price decline. As of February 2, 2024, the overall cryptocurrency market has been experiencing a notable price drop. Despite this, SOL has reached a crucial support level with a history of impressive price reversals.
$100 Million Worth SOL Outflow
According to data from the on-chain analytics firm CoinGlass, long-term holders and investors have been accumulating SOL tokens. Over the past 48 hours, exchanges have seen a significant outflow of over $100 million worth of SOL tokens. This outflow indicates potential accumulation by investors, presenting an ideal buying opportunity that could lead to buying pressure and trigger an upside rally.
However, intraday traders seem to be moving in the opposite direction from crypto whales, as they are capitalizing on the current market sentiment.
Traders Bearish View
Short sellers are significantly betting on the short side, with $236.30 being a level where they are over-leveraged, holding $175.50 million worth of short positions. On the other hand, at $223, bulls hold $46 million worth of open long positions, indicating another over-leveraged level. This data suggests that investors and long-term holders are optimistic about long-term gains and view the current situation as an opportunity, while short-sellers are taking advantage of the market sentiment for short-term gains.
Current Price Momentum
As of now, SOL is trading near $224.15, experiencing a 3% price drop in the past 24 hours. The trading volume has also decreased by 20%, indicating lower participation from traders and investors compared to the previous day.
Solana (SOL) Technical Analysis and Upcoming Levels
Expert technical analysis suggests that SOL appears bullish despite the recent accumulation. It has formed a bearish inverted cup and handle pattern on the daily timeframe and is on the verge of a neckline breakdown. If SOL breaches the neckline and closes a daily candle below $220, there is a high probability of a price drop of over 14% to reach the next support level at $190.
However, this bearish scenario will only materialize if SOL closes a daily candle below the neckline; otherwise, it may fail to follow through. Investors and traders should closely monitor the price action and key levels to make informed decisions in the current market environment.