Solana (SOL) Price Declines, Creating Gap with BNB
Solana’s price has experienced significant declines in the past week, following a period of consistent gains in December. At the time of writing, SOL is down 4.5% in the past 24 hours and is trading at $90.7. This drop in price has caused the asset’s market cap to fall to $39.2 billion, resulting in a $6 billion gap between SOL and the fourth-largest cryptocurrency, BNB.
Increase in Daily Trading Volume
Despite the price decline, Solana’s daily trading volume has seen a surge of 39%, reaching $2.9 billion.
Potential Rally Indicated by RSI
According to data from Santiment, Solana’s Relative Strength Index (RSI) currently hovers around the 35 mark. The RSI has been consistently falling over the past week, starting at 73 on January 2. This suggests that there is less selling pressure compared to when SOL was trading at around $110 last week, indicating the potential for a notable rally. To record a price rally, Solana’s RSI would need to stay below the 50 mark.
Declining Open Interest and Funding Rate
Data from Santiment also reveals that Solana’s total open interest (OI) has decreased from $1.3 billion on January 1 to approximately $880 million. Additionally, the total funding rates for Solana have dropped by 90% over the past seven days, currently standing at 0.008%. This indicates that long-position holders have a slight dominance over short-position holders until further market movements.
Conclusion: Investors Reacting to Solana’s Price Decline
The decline in Solana’s open interest suggests that investors may have faced strong liquidations or closed their trading positions as the asset’s price dropped below $100. Despite these challenges, the surge in daily trading volume and the potential for a rally indicated by the RSI provide some optimism for Solana’s future performance.
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