Solana (SOL) fell sharply in the past couple of days, following a failed climb above the $121 resistance.
Trading volumes jumped by 65% in the past 24 hours as the selling intensified yesterday, rising to nearly $5 billion. This figure accounts for almost 8% of the asset’s circulating market cap, indicating that the selling spree has triggered a cascade of liquidations.
Data from CoinGlass confirms this, as more than $1 billion worth of long positions in the futures market were wiped out as a result of this strong decline, with SOL futures ranking third with $53 million in long liquidations.
Odds of a Rate Hike in October Were Unchanged After FOMC Minutes
Oil prices stood above $90 even though President Trump vowed not to approve further attacks on Iran until mid-term elections.
Meanwhile, the release of the FOMC minutes on Wednesday did not impact the market’s baseline scenario when it comes to interest rates, as odds of a rate hike this month stood unchanged below 20%.
Despite a supportive macro environment, cryptocurrencies as a whole were already needing a pullback as liquidity dried up following a strong climb in late September to multiple short-term targets.
In Solana’s case, the $120 area was the key resistance to watch, and this latest selling spree confirms the technical relevance of this price zone.
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See all Solana forecastsNet Inflows to Solana ETFs Turn Negative in October
Net inflows to exchange-traded funds (ETFs) linked to Solana indicate that Wall Street is taking profits after the token’s latest rally.
Investors have withdrawn money in 6 out of the last 7 sessions, pushing net inflows to negative territory this month. In September, Solana’s net inflows climbed to $272 million, up by 41% compared to the previous month.
Hence, if this month closes with a negative figure, that would indicate a strong shift in sentiment. We still have to wait until the price action starts sending signals that it has found liquidity at lower thresholds.
Meanwhile, on-chain data shows that even though app fees have been steadily climbing, trading volumes on decentralized exchanges (DEXs) within the Solana ecosystem have been dropping for three weeks in a row.
This could be one of the reasons why the price of SOL is retreating, as lower DEX volumes indicate a deterioration in the blockchain’s fundamentals in the near term.
Strong Rebound Off $106 Could Be Misleading
Our main focus right now is set in a buy zone below $100 that could act as a psychological cushion for this latest drop.
SOL saw strong demand at around $106 during yesterday’s session, which indicates that liquidity at these levels is high.
Since the token just hit a key structural area, we could expect a strong rebound off this mark, potentially targeting $120 once again. However, we don’t think that this will lead to a breakout, as the market may need to go deeper into the order book to achieve that.
Hence, our ideal buy zone stands at $100, due to this area’s psychological and technical relevance. At that level, a long position for SOL would offer a much higher risk-reward ratio, as the odds that it can push the token beyond $120 will increase dramatically.
