- SOL has continued to decline.
- SOL has entered a further bear trend due to the price drop.
These past few days, Solana [SOL] has experienced successive declines, leading to a significant depreciation. The Ichimoku cloud indicator highlights the magnitude of this decline.
It provides insight into where Solana’s price could go. As the price has fallen, so has the inflow of cash into Solana, with traders taking a more cautious stance.
Solana falls under the clouds
Analysis of Solana revealed that it has experienced consecutive declines over the past seven days, bringing its price down to around $137.14 at the time of writing.
Further analysis using the Ichimoku Cloud indicator showed that the cloud, or Kumo, is relatively thin and transitions from a flat to a slightly downward direction.
This shift signals weakening support and the possibility of further declines. Moreover, the price is below the cloud, which is generally considered a bearish signal.
Source: TradingView
The green and red lines (Senkou Span A and B) that form the cloud represent future support and resistance levels. Now that Cloud is above the current price, it is acting as a resistance zone, indicating that Solana may face challenges in breaking this level soon.
Where the SOL price could go from here
The analysis shows that the next major support level for Solana is around $130, based on previous lows observed in June. If the price falls below this level, it could fall further, with the next target around $120.
On the resistance side, the Ichimoku Cloud presents the first major resistance zone, ranging from around $146 to $152. If Solana’s price tries to stage a turnaround, this area would be the first hurdle to clear.
Outside of the cloud, the 50-day moving average, which is currently around $155, serves as another critical resistance level. Overcoming these resistance zones would be crucial for Solana to exit the current bearish trend and begin a possible recovery.
Open interest in Solana is decreasing
The recent consecutive declines in Solana [SOL] have significantly dampened interest in the cryptocurrency, as evidenced by data from Santiment.
An analysis of the open interest chart shows a clear decline over the past five days. On August 27, SOL’s open interest was over $817 million, but it has since fallen to around $652 million.
This drop in open interest indicates reduced cash inflow. It suggests that fewer traders are currently engaging in SOL trades, reflecting declining enthusiasm and participation.
Source: Santiment
Read Solana (SOL) price forecast 2024-25
In addition, data from CoinMarketCap shows that Solana has fallen by over 13% in the last seven days, making it the biggest loser among the top five cryptocurrencies.
Within the top ten, Solana is the second biggest loser, just behind Toncoin (TON), which has suffered a substantial loss of more than 20% over the same period.