Solana Futures Plunge as Bearish Sentiment Intensifies, Price Drops Below $138

Solana (SOL) has experienced significant volatility in recent weeks, leading to a sharp decline in its futures market sentiment. Leveraged traders appear reluctant to take bullish positions, increasing the risk of further price drops. The lack of confidence among traders suggests that SOL could dip below the $130 level in the near term.

One key indicator of this bearish sentiment is the negative funding rate for SOL perpetual futures. This rate has been negative for the past three days, indicating that short sellers are paying to hold their positions. At the time of reporting, this rate stands at -0.0060%. The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to keep the contract price aligned with the spot market. When this rate is negative, it means that short sellers are paying fees to long traders, reinforcing the bearish sentiment in the market.

Moreover, the plummeting open interest in SOL futures further reflects the lack of confidence among traders. At the time of reporting, the open interest is at $3.94 billion, falling 19% since the beginning of March. An asset’s open interest tracks the total number of active futures contracts that have not been settled. When this falls, especially during a period of price decline, it suggests that traders are closing positions without opening new ones, confirming the reduced conviction in a short-term SOL price recovery.

At the time of reporting, SOL trades at $137.70, resting just above the support floor of $136.62. As bullish sentiment tapers, this level risks being flipped into a resistance zone. Should this happen, SOL’s price could slip below $130 to exchange hands at $120.72. On the other hand, if bullish momentum returns to the SOL market, this bearish projection will be invalidated. In that scenario, new demand could drive the coin’s price to $182.31.