- Solana has experienced a steady decline over the past seven days.
- Despite applying the Solana ETF, negative market sentiment persisted.
After a sustained downward trend, Solana (SOL) became overvalued after Canadian digital asset management company 3iQ applied for a SOL ETF. In its report, 3iQ reported on
“3iQ Corp is pleased to announce that it has filed a preliminary prospectus for the Canadian Solana Fund (QSOL) in an initial public offering.”
Applying for QSOL is a golden opportunity for traders and enthusiasts as it provides the opportunity to enjoy profits through SOL staking.
Likewise, increasing the investment pool broadens the scope of those seeking to earn income while supporting the SOL ecosystem.
The approval of QSOL will bring diversity and openness to other altcoins.
In essence, the approval and success of QSOL will hopefully inspire other countries, especially the United States, to enter into similar agreements and continue to consider approving ETFs for other smaller cryptocurrencies.
Impact of QSOL application on the market
Over the past seven days, SOL has experienced a significant downward trend. Despite the news of QSOL implementation, the market did not react positively and failed to reverse the trend.
However, various cryptocurrency analysts have expressed optimism about the development. For example, Ash Crypto shared his analysis of X, saying:
” Sol is now testing its support levels again. “For Solana, everything screams optimism.”
Source: TradingView
Despite the excitement and optimistic news, AMBCrypto’s analysis shows that market sentiment remains bearish. At press time, SOL was trading at $134.63, up 0.66% in the last 24 hours.
meOver the past 7 days, it has decreased by 6.53%, with trading volume down 62% to $738 million. According to CoinMarketCap, SOL’s market cap rose 0.59% in 24 hours to $62.2 billion.
Source: TradingView
SOL’s RSI continues to decline. At press time, RSI is 35 points below the RSI-based MA of 38. After falling below the MA as of June 6, the trend failed to reverse, showing selling pressure.
Continued selling pressure showed SOL plummeting into oversold territory at press time.
Source: TradingView
According to Bollinger Bands, the next important support level for SOL was around 120. This showed the potential for further declines if current support levels are not maintained.
prevailing market sentiment
Analysis by AMBCrypto via Santiment shows open interest continuing to decline from $728 million to $636 million. The continued decline in open interest indicates a decline in preference and interest in altcoins.
Low interest rates mean that diminished investors are closing losing positions rather than opening new positions, which is a bearish market sentiment.
Source: Santiment
Similarly, Coinglass’s volume-weighted funding ratio also continued to decline. Declining funding rates indicate increased negative sentiment among investors as demand for leveraged long positions is low.
Source: Coinglass
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Will SOL recover or fall further?
AMBCrypto’s analysis shows that SOL is trending downwards towards the lower support level around $127.
If the altcoin holds this support level, it will challenge the resistance level around $155. However, if the support level does not hold, it will fall between $121 and $120.