Similar to Bitcoin, Ether, and XRP, Solana’s SOL has been underperforming since the start of the week.
The bearish performance, which began on Sunday, has seen SOL drop below the $80 support level, extending its 6% drop from Monday amid increased sell pressure.
However, the institutional support holds for Solana with Exchange Traded Funds (ETFs) expanding exposure, but the derivatives market shows that retail traders are still reluctant to open long positions.
The technical outlook for Solana is bearish, with the bears eyeing the recent February 6 low of $67.
Institutional investors flock to Solana amid market downturn
SOL is down 4.5% in the last 24 hours and is now trading at $76.5 per coin.
The coin is approaching the $75 support level, but remains a favourite among institutional investors.
US spot Solana ETFs recorded $7.99 million in inflows on Monday, extending the accumulation spree for the ninth consecutive trading session.
While institutions continue to accumulate, retail traders remain bearish.
CoinGlass data shows that SOL’s Open Interest (OI) stands at $4.92 billion on Tuesday, down 1.44% over the last 24 hours, suggesting risk-off sentiment among traders.
The current market conditions resulted in long liquidations accounting for $15.97 million over the same time period, which is significantly higher than the short liquidations of $3.46 million.
The dip in OI amid increased long liquidations shows that more bullish traders were liquidated, driving the traders to the sidelines.
Furthermore, SOL’s long-to-short ratio now stands at 0.9627, indicating that there are more short positions in the market.
Additionally, the funding rate remains negative at -0.0027%, reaffirming the current bearish bias.
Will Solana extend its fall below $70?
The SOL/USD pair has dropped below $80, resulting in its third consecutive day of losses.
The bearish trend means that Solana remains below the 50- and 200-day Exponential Moving Averages (EMAs), with both slopes lower, indicating a bearish bias.
If the bearish trend persists, SOL could retest the crucial $75 support level in the near term.
An extended selloff period will see the bears push the price towards the February 6 low of $67.50.
The technical indicators on the 4-hour chart suggest that the short-term recovery is losing strength.
The Moving Average Convergence Divergence (MACD) is diverging and remains below zero, suggesting fading bullish momentum.
At the same time, the Relative Strength Index (RSI) is at 37, stretched to the downside, and approaching the oversold conditions.
However, if the bulls defend the $75 support level and SOL bounces back, it could rally towards the February 15 high at $91.26.
The next key resistance at the 50-day EMA at $102.90 could be challenging for the bulls in the near term.
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