Solana

when

April

Solana’s (<a data-ct-non-breakable="null" href="https://cointelegraph.com/solana-price-index" rel="noopener noreferrer nofollow" target="_self" text="null">SOL</a>) price closed its second-worst weekly return of 2024, i.e. 19.14% at the end of August. Previously, its largest negative weekly ROI of 25.19% took place a month prior in July.
<h2 id="solana-oi-rises-20-as-funding-rate-turns-negative">Solana OI rises 20% as funding rate turns negative</h2>
With SOL&nbsp;<a data-ct-non-breakable="null" href="https://www.coinglass.com/spot-inflow-outflow" rel="noopener noreferrer nofollow" target="null" text="null">witnessing</a>&nbsp;a negative spot net flow of $500 million in August, the derivatives market is currently taking charge of the price action.
Last week, Solana’s open interest (OI) dropped 12% in 24 hours after prices dropped under $150. Since then, prices have dropped another 14%, but OI has risen by 20% in the markets.
A rise in open interest during a market drawdown indicates aggressive short-selling from futures traders.
<figure><img alt="Is Solana price dropping under $100 in September?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191b1cf-e07d-780b-91ee-5512c914441a">
 <figcaption style="text-align: center;">
 SOL price, aggregated open interest, and funding rate. Source: Velodata
 </figcaption>
</figure>
A negative funding rate further confirms bearish bias. This metric has remained negative for the past week, its longest stretch since October 2023. The current funding rate of -0.001 is its lowest in 2024.
<h2 id="sol-weekly-dex-volume-drops-to-a-6-month-low">SOL weekly DEX volume drops to a 6-month low</h2>
Declining onchain activity has been playing out on Solana over the past month, with euphoria around memecoins relatively fading out. <a data-ct-non-breakable="null" href="https://dune.com/hagaetc/dex-metrics" rel="noopener noreferrer nofollow" target="_blank" text="null">Data</a> from Dune Analytics illustrated a $7.7 billion weekly DEX volume last week, which is a 6-month low for the ecosystem.
In March, Solana’s daily&nbsp;<a data-ct-non-breakable="null" href="https://x.com/joemccann/status/1769559063795568807" rel="noopener noreferrer nofollow" target="null" text="null">DEX volume</a>&nbsp;was 50% more than Ethereum’s, and its 24-hour trading volume regularly crossed $3 billion.
<figure><img alt="Is Solana price dropping under $100 in September?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191b1f1-afc9-7b38-aa93-15f8d20d9f4c">
 <figcaption style="text-align: center;">
 Solana DEX volume chart. Source: Dune Analytics
 </figcaption>
</figure>
<h2 id="sol-btc-chart-looks-horrid-says-analyst">“SOL/BTC chart looks horrid,” says analyst</h2>
Solana and Bitcoin have&nbsp;<a data-ct-non-breakable="null" href="https://www.blockchaincenter.net/en/crypto-correlation-tool/?timeframe=90days&amp;asset1=SOL&amp;asset2=BTC" rel="noopener noreferrer nofollow" target="null" text="null">demonstrated</a>&nbsp;a rising correlation in 2024, which allowed the altcoin to outperform BTC during Q1 of 2024. With markets moving sideways and lower over the past few weeks, this correlation has remained, which means the altcoin experiences larger drawdowns than Bitcoin.
Bluntz_Capital, an independent trader, indicates that SOL/BTC is possibly heading toward another leg down. In <a data-ct-non-breakable="null" href="https://x.com/Bluntz_Capital/status/1830397725831204911" rel="noopener noreferrer nofollow" target="_blank" text="null">an X post</a>, the analyst said,
<blockquote>
 “sol/btc on weekly looks horrid, legit looks proper topped out to me with the complacency shoulder and everything.”
</blockquote>
<figure><img alt="Is Solana price dropping under $100 in September?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191b203-d55c-7f54-aa0b-b6aaabde5f13">
 <figcaption style="text-align: center;">
 SOL/BTC chart from bluntz_capital. Source: X.com
 </figcaption>
</figure>
<h2 id="solana-price-faces-critical-test-at-127">Solana price faces critical test at $127</h2>
Before a retest of $100, the closest major support level is near $127.
Since April 2024, Solana has briefly dropped below $120 six times, but on each occasion, the altcoin managed to close a daily candle above $127, which is also the lower limit of an accumulation zone (green box). The difference this time around, is SOL has lost support from the 200-day EMA (orange indicator).
<figure><img alt="Is Solana price dropping under $100 in September?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191b220-17ff-7bd9-8c5d-e304cf079044">
 <figcaption style="text-align: center;">
 SOL/USD daily chart. Source: TradingView
 </figcaption>
</figure>
Earlier, while closing above $127, it also registered a daily close above the 200-day EMA. SOL has closed for multiple days below the EMA level for the first time since September 2023, further emphasizing the chart’s bearish structure.
If Solana loses $127, the immediate target is $110, which will be a liquidity sweep for the altcoin. A pullback from $110 would be ideal here would be ideal for the bulls.
However, if September becomes a prolonged bearish period for the market, SOL could potentially retest the demand zone between $98 and $104 (blue box).
The worst-case scenario for SOL would be a $100 retest, which would be a 22% correction and a new lower low for the altcoin.
Therefore, if Bitcoin drives a bullish Q4, Solana price should not drop below $100 in September.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Is Solana price dropping under $100 in September?

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