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Amid the bearish market sentiment, SOL, the native token of the Solana blockchain, is gaining significant attention from crypto enthusiasts due to its recent price decline. As of today, February 2, 2024, the overall cryptocurrency market has been witnessing a notable price decline. Despite this, SOL has reached a crucial support level with a history of impressive price reversals.
$100 Million Worth SOL Outflow
Looking at the historical price momentum, long-term holders and investors have been accumulating the tokens, as reported by the on-chain analytics firm CoinGlass. Data from spot inflows and outflows revealed that exchanges have witnessed a significant inflow of over $100 million worth of SOL tokens in the past 48 hours.
This outflow from the exchanges indicates potential accumulation, and given the current market sentiment, it seems to be an ideal buying opportunity. It has the potential to create buying pressure and trigger a further upside rally.
However, intraday traders seem to be moving in the opposite direction from of the crypto whales, as they appear to be capitalizing on the current market sentiment.
Traders Bearish View
Data shows that short sellers are significantly bet on the short side. According to the data, $236.30 is a level where short sellers are over-leveraged, holding $175.50 million worth of short positions. Meanwhile, $223 is another over-leveraged level, where bulls hold $46 million worth of open long positions.
When combining this data, it appears that investors and long-term holders are betting on long-term gains and see this as an opportunity, which explains the recent potential accumulation. Meanwhile, short-sellers seem to be taking advantage of the current market sentiment and betting on short-term gains.
Current Price Momentum
SOL is currently trading near $224.15 and has experienced a price drop of 3% in the past 24 hours. During the same period, its trading volume dropped by 20%, indicating lower participation from traders and investors compared to the previous day.
Solana (SOL) Technical Analysis and Upcoming Levels
According to expert technical analysis, SOL appears bullish despite the recent accumulation, as it has formed a bearish inverted cup and handle pattern on the daily time frame and is poised for a neckline breakdown.
Based on the recent price action, if SOL breaches the neckline and closes a daily candle below $220, there is a strong possibility that SOL could witness a price drop of over 14% to reach the next support level at $190.
However, this bearish thesis will only hold if SOL closes a daily candle below the neckline; otherwise, it may fail.
