The popular altcoin Solana has seen a 30% increase in the last 30 days. It has been trading within an ascending channel since mid-April, highlighting the increase in buying pressure in the market.
However, this bullish momentum is currently facing significant obstacles as trader sentiment begins to shift.
The ratio of long and short positions in Solana has reached a monthly low.
According to Coinglass data, the long-to-short ratio for Solana has dropped to 0.86, the lowest level in the past 30 days. This decrease indicates that bearish sentiment has peaked for the month, and traders are increasingly favoring short positions over long ones. The long-to-short ratio measures the proportion of long positions to bearish shorts in the market. When this ratio exceeds one, it means there are more long positions than short ones. This indicates bullish sentiment when many traders expect the asset's price to rise.
On the other hand, the long-to-short ratio below one signals a preference for short positions as traders bet on a decline in the asset's price.
For SOL, the decline in the ratio indicates an increasing number of traders preparing for a pullback, expecting that the token's rally will lose momentum. If this trend continues, SOL may face short-term pressure, increasing the likelihood of consolidation or a decline from recent highs.
Additionally, on the daily chart, the negative Balance of Power (BoP) indicator for SOL confirms this bearish outlook. At the time of writing, this key momentum indicator stands at -0.32. The BoP indicator measures the strength of buying pressure against selling in the price dynamics of the asset. When it is negative, it signals that sellers currently dominate the market, indicating an increase in profit-taking or bearish momentum.
Solana faces selling pressure amid market cooling.
Against the backdrop of the overall market decline over the past day, the price of SOL has dropped by 3%. If interest in shorts continues to rise and selling pressure intensifies, the token may struggle to maintain its recent breakout levels in the coming days.
In this case, the price of SOL may break the lower line of its ascending channel, which currently forms support at $161.85. Breaking this level intensifies the price decline and could force SOL to drop to $142.32. However, if the bulls regain dominance and buying pressure increases, the value of SOL may rise to $181.45.#BinanceSquare #TradeStories #Binance #solana #AltcoinSeasonLoading $SOL