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Solana (SOL) Down 6% in Hours, What Indicator Suggests
The recent price decline of Solana (SOL), down 6% in just a few hours, has left investors and traders alike questioning the direction of the cryptocurrency. After peaking at $205 on February 14th, SOL’s downward trajectory continued as it dropped below its crucial SMA 200 mark at $183 before bouncing back to its current price.
According to recent data from CoinGlass, Solana’s open interest (OI) is rising while OI-weighted funding rates remain negative. This bearish sentiment has led to oversold conditions for SOL, which may potentially trigger a reversal in the near future.
In light of this information, it seems likely that SOL will see an upward correction as leveraged traders begin to cover their shorts and maintain their positions. The negative funding rate, as mentioned earlier, suggests that short sellers are paying longs to keep their positions open, which could result in a short squeeze. This phenomenon would be triggered by the increasing cost of maintaining these short positions, ultimately leading to SOL’s price rebound.
In other words, Solana’s current oversold condition may have created an opportunity for traders and investors alike to capitalize on a potential upswing in the near future, as the market adjusts its sentiment towards this asset.
Source: u.today
