Solana Plummets 10% After ETF Inflow Streak Ends

Solana Plummets 10% After ETF Inflow Streak Ends – What’s Next for SOL?

Recently, Solana (SOL) experienced a significant decline of 10% from its peak of $140.19, which was reached on November 30th. As of the last update, SOL is trading at $126.02 after experiencing its first daily outflow from spot exchange-traded funds (ETFs) in 21 days. Alongside the end of this inflow streak, developers propose a major change to enhance token scarcity, potentially affecting staking rewards. This article analyzes Solana's present market status and what may be in store for SOL.

Key Takeaways

Solana has decreased by 10% from its peak of $140.19, currently trading at $126.02.
The first daily outflow from ETFs occurred on November 28, breaking a 21-day streak of inflows.
Proposed tokenomics changes aim to improve scarcity but may lower staking rewards.
Technical indicators suggest a bearish trend, with critical price levels identified.
SOL may revisit the $95-$105 support zone, while short-term resistance lies between $130 and $137.

Solana falls 10% as ETF streak ends - What will be SOL's next move?

Market Overview

Solana has witnessed a 10% drop since its height of $140.19 on Sunday, November 30th. At the time of this report, it was trading at around $126.02. This decrease is partly attributed to the first daily outflow from spot ETFs on November 28, disrupting a 21-day period of consistent inflows. The weekend did not bring any relief, as low liquidity on Sunday resulted in a significant correction across the market.

A key proposal from Solana developers aims to enhance long-term scarcity but comes with the downside of reducing staking rewards. Approval for this proposal has yet to be finalized, and its potential impact on SOL price trends remains to be seen.

Technical Analysis

Solana 1-day Chart

The daily chart reflects a clear bearish trend. If the support level at $121.66 (highlighted in cyan) is breached, it would indicate that another bearish movement is likely. The recent resistance at $144 indicates a crucial supply zone that the market needs to overcome.

Solana 1-hour Chart

On the hourly chart, Solana is currently testing the long-term support level around $126.7. The demand zone between $125 and $127 has proven significant over the last ten days, and it may continue to act as support. Conversely, an imposing supply zone exists in the range of $129.7 to $137.

Indicator Insights

Indicators on both daily and hourly timeframes reveal that the Chaikin Money Flow (CMF) is below -0.05, indicating considerable capital outflows. Additionally, both the Stochastic RSI and moving averages highlight a bearish momentum trend across these timeframes.

Key Levels to Watch

The significant price levels for Solana are $121.66 on the downside and $144.7 on the upside. A break below $121.66 could push SOL towards the support zone of $95-$105. However, the $125-$127 region may provide a minor price bounce. Resistance levels are notably strong between $130-$137.

Conclusion

As Solana navigates this turbulent period, monitoring the identified price levels will be critical for discerning its next steps. While the proposal for enhanced tokenomics could shift long-term dynamics, the immediate effects on price and market sentiment remain to be seen.

Disclaimer: The information presented in this article does not serve as financial, investment, trading, or other forms of advice and represents solely the writer’s perspective.