Solana has recorded its fifth consecutive weekly decline as persistent selling pressure pushes the asset below vital technical support levels. After dropping over 8% last week, SOL broke through its key $90 psychological threshold and is currently trading around $86.46. The weakness in spot markets has been compounded by continuous institutional redemptions from Solana-focused Exchange-Traded Funds (ETFs). Coupled with futures Open Interest falling to a two-month low and a negative funding rate, technical setups suggest that Solana faces downside risks toward its next major demand zone around $77.
Institutional Caution and Unrelenting ETF Outflows
Institutional interest in Solana investment products has turned decidedly negative. According to data from SoSoValue, Solana ETFs have experienced nearly $170 million in cumulative outflows over the past five weeks. Last week alone, institutional investors pulled $26.25 million from SOL-backed funds. This follows a peak weekly outflow of $71.47 million recorded in the previous month.
Heavy redemptions highlight fading demand among institutional market participants amid broader macroeconomic uncertainty. The continuous retreat over five straight weeks has removed a major source of buying power from the market. Market analysts emphasize that without a turnaround in weekly ETF flows, establishing a durable price floor will remain challenging for Solana bulls.
Futures Market Unwinding and Liquidation Imbalance
The derivatives market reflects a similar decline in market engagement. CoinGlass tracking shows that SOL futures Open Interest (OI) has plummeted to $5.10 billion, marking its lowest reading since August 19. This represents a substantial contraction from the peak of $7.62 billion recorded on October 8. The steady unwinding of open positions mirrors both spot price declines and ETF redemptions, pointing to institutional deleveraging as a primary driver of the ongoing correction.
Positioning data further confirms a short-side bias among active traders. Solana's funding rate stands at -0.0033%, signaling that short sellers are currently paying a premium to maintain bearish positions. On-chain liquidation metrics reinforce this dynamic, with $33.64 million in long positions wiped out on Sunday compared to just $1.35 million in short liquidations.
Technical Indicators Point to Death Cross Risk
Solana's technical structure on daily timeframe charts continues to weaken. Following a 19% drop throughout October, SOL extended its downtrend by slipping below its 200-day Exponential Moving Average (EMA) at $99.26 as well as an ascending trendline that had connected lows from June and August around $90.41.
Chartists are also monitoring the potential formation of a 'death cross', as the declining 50-day EMA at $100.35 threatens to cross below the 200-day EMA. A confirmed death cross typically signals an acceleration of a long-term bearish trend. Momentum oscillators remain suppressed, with the Relative Strength Index (RSI) at 27 in oversold territory and the Moving Average Convergence Divergence (MACD) histogram remaining negative at -5.05, indicating that downward momentum has not yet reached exhaustion.
Crucial Support and Resistance Zones
On the downside, Solana sits immediately above horizontal support at $87.46, with secondary support near $85.36. A sustained breakdown below these levels opens the path toward the primary demand zone around $77.60. Should selling intensify further, historical chart structures indicate deeper support barriers at $67.50 and $60.13, which represent the base of the multi-month uptrend.
Conversely, any potential relief rally will encounter immediate overhead resistance at the broken trendline near $90.41. Beyond that level, horizontal resistance stands at $95.82, followed by dynamic resistance at the 20-day EMA of $95.18 and the 50-day EMA at $100.21.
Broader Crypto Correction and Macro Factors
Solana's struggle reflects broader weakness across the digital asset space. Cardano (ADA) trades near $0.176 after dropping over 9% last week, marking its fifth straight week of losses. On-chain data indicates large whale wallets have reduced their ADA holdings, adding pressure to an already deteriorating technical picture.
Zcash (ZEC) has shown minor recovery after consecutive losing sessions, though institutional funds recorded $13 million in outflows, leaving ZEC consolidating between $1,112 and $1,340. Meanwhile, major cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) corrected over 4%, 6%, and 10% respectively last week. Bitcoin trades around $75,530, with technical analysts identifying $70,000 as the next major line of support.
Market sentiment across crypto and traditional risk assets has also been influenced by macroeconomic data. A stronger-than-anticipated U.S. Nonfarm Payrolls report reshaped market expectations regarding interest rate cuts, driving a broad risk-off mood across equities, commodities, and digital currencies.
