Solana’s price has been trying to exceed the $200 mark for the past two weeks but has been unsuccessful. The decline in Open Interest (OI) suggests that investor confidence is fading, while the drop in funding rates indicates that traders are hesitant to make bullish bets.
SOL briefly climbed to $210 recently before facing a sharp decline. Over the past two weeks, it has been striving to break the $200 barrier without success. This struggle may have dampened investor optimism and could contribute to future price drops.
Solana Struggles to Break $200 Resistance
Currently, Solana’s price stands at $190, with ongoing difficulty in surpassing the $200 resistance level. The persistent inability to breach this barrier, coupled with a decline in Open Interest (OI), suggests a decrease in investor confidence.
Over a two-day period, Open Interest (OI) dropped from $3.14 billion to $2.88 billion, indicating a 15% decrease. This decline implies that traders are hesitant to establish positive positions on SOL amid the current consolidation phase. Furthermore, the decreasing funding rate signals a growing reluctance among traders to initiate bullish positions.
The funding rate serves as a crucial tool in perpetual futures contracts, particularly in cryptocurrency and other financial sectors, aimed at maintaining the price of the perpetual contract close to the spot price of the asset in question.
Following unsuccessful attempts to breach the $200 resistance level, the funding rate experienced a downturn within 48 hours. This decline mirrors the overall downward trend in the market, with the funding rate nearing its lowest levels in the past two months and approaching negative territory.
As a result, if Open Interest and the funding rate don’t improve soon, investors might witness Solana’s price heading downwards.
Solana’s Price Analysis and Institutional Interest
Currently trading at $190, Solana is undergoing a critical phase as bulls attempt to regain the 50-day Exponential Moving Average (EMA) support, aiming to sustain above the $181 level. However, even amidst efforts to breach the $200 mark, there’s a possibility of SOL dropping to $168.
This indicates that Solana is caught in a consolidation phase, fluctuating between $168 and $200, with a tendency to move sideways.
Institutional Interest and Net Flow
Despite facing these challenges, Solana maintains its appeal as one of the preferred cryptocurrencies among institutional investors.
A recent report by CoinShares on institutional net flow revealed that Solana attracted around $25 million in the previous month, surpassing all other altcoins. Notably, this includes Ethereum, which was highlighted as the standout cryptocurrency in the report.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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