Is Solana price dropping under $100 in September?
SOL price has lost support and closed multiple daily candles below the 200-day EMA for the first time since September 2023.
Solana’s ( SOL ) price closed its second-worst weekly return of 2024, i.e. 19.14% at the end of August. Previously, its largest negative weekly ROI of 25.19% took place a month prior in July.
Solana OI rises 20% as funding rate turns negative
With SOL witnessing a negative spot net flow of $500 million in August, the derivatives market is currently taking charge of the price action.
Last week, Solana’s open interest (OI) dropped 12% in 24 hours after prices dropped under $150. Since then, prices have dropped another 14%, but OI has risen by 20% in the markets.
A rise in open interest during a market drawdown indicates aggressive short-selling from futures traders.
A negative funding rate further confirms bearish bias. This metric has remained negative for the past week, its longest stretch since October 2023. The current funding rate of -0.001 is its lowest in 2024.
SOL weekly DEX volume drops to a 6-month low
Declining onchain activity has been playing out on Solana over the past month, with euphoria around memecoins relatively fading out. Data from Dune Analytics illustrated a $7.7 billion weekly DEX volume last week, which is a 6-month low for the ecosystem.
In March, Solana’s daily DEX volume was 50% more than Ethereum’s, and its 24-hour trading volume regularly crossed $3 billion.
“SOL/BTC chart looks horrid,” says analyst
Solana and Bitcoin have demonstrated a rising correlation in 2024, which allowed the altcoin to outperform BTC during Q1 of 2024. With markets moving sideways and lower over the past few weeks, this correlation has remained, which means the altcoin experiences larger drawdowns than Bitcoin.
Bluntz_Capital, an independent trader, indicates that SOL/BTC is possibly heading toward another leg down. In an X post , the analyst said,
“sol/btc on weekly looks horrid, legit looks proper topped out to me with the complacency shoulder and everything.”
Solana price faces critical test at $127
Before a retest of $100, the closest major support level is near $127.
Since April 2024, Solana has briefly dropped below $120 six times, but on each occasion, the altcoin managed to close a daily candle above $127, which is also the lower limit of an accumulation zone (green box). The difference this time around, is SOL has lost support from the 200-day EMA (orange indicator).
Earlier, while closing above $127, it also registered a daily close above the 200-day EMA. SOL has closed for multiple days below the EMA level for the first time since September 2023, further emphasizing the chart’s bearish structure.
If Solana loses $127, the immediate target is $110, which will be a liquidity sweep for the altcoin. A pullback from $110 would be ideal here would be ideal for the bulls.
However, if September becomes a prolonged bearish period for the market, SOL could potentially retest the demand zone between $98 and $104 (blue box).
The worst-case scenario for SOL would be a $100 retest, which would be a 22% correction and a new lower low for the altcoin.
Therefore, if Bitcoin drives a bullish Q4, Solana price should not drop below $100 in September.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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