Bitcoin, Ether, and XRP are in the red as the cryptocurrency market reacts to the ongoing crisis in the Middle East.
Solana’s SOL is not left out as it is one of the worst performers in the top 10, down 2.1% since Sunday.
At press time, SOL is trading at $84, coiling further within a consolidation range that keeps the momentum trapped.
The consolidating phase comes as institutional interest in Solana resurfaced last week, with inflows of over $44 million capping downside pressure.
Retail interest in SOL remains low, with declining futures Open Interest (OI) suggesting that traders are cautious about the current market conditions.
Middle East tensions affect SOL’s recovery
SOL is down 2% on Monday despite regaining institutional support last week.
Official data from SoSoValue revealed that the US spot SOL Exchange Traded Funds (ETFs) recorded $44.44 million in weekly inflows, driven by $30.86 million in daily inflows on Wednesday.
Despite that, retail sentiment in the broader crypto market remains risk-averse amid the ongoing conflict in the Middle East.
This has affected retail participation in Solana over the past few days.
According to CoinGlass, SOL’s futures OI stands at $4.93 billion, down over 6% in the last 24 hours, suggesting that retail investors are reducing their exposure to the market.
This coincides with positional wipeout, with total liquidations of $26.47 million recorded in the same time period, led by $20.47 million in long liquidations, suggesting a broader wipeout of bullish positions.
However, the funding rate remains positive. SOL’s funding rate currently reads 0.0037%, indicating that traders are willing to build and hold long positions at a premium.
Technical outlook: Will Solana break out of its consolidation phase?
The SOL/USD 4-hour chart remains bearish despite the current consolidatory phase.
At press time, SOL is trading at $84.05, with the near term bias currently bearish.
SOL is trading below the 50-day and 200-day Exponential Moving Averages (EMAs) at $99.06 and $137.23.
These levels could limit the recovery attempt for the coin over the next few hours or days.
Meanwhile, the technical indicators show improved momentum.
The Moving Average Convergence Divergence (MACD) on the 4H chart has extended higher above its signal line, rising from negative territory, suggesting fading upside momentum.
The Relative Strength Index (RSI) at 50 remains below the midline, reflecting growing demand and aligning with the broader market risk-off sentiment.
If the bearish trend persists, SOL will likely retest the first major support level at $77.60.
Failure to defend this zone will see SOL test the February 6 low at $67.50.
However, if the bulls push higher, SOL should clear $93.43 to test the 50-day EMA near $99.06.
Closing the daily candle above this level would open the way toward the 200-day EMA around $137 as the next upside barrier.
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