Bearish Indicators: SOPR and Short Positions Flash Caution
The Spent Output Profit Ratio (SOPR) has dropped significantly from 1.04 to nearly 1.00. This suggests that most sellers are no longer making a profit, a classic sign of waning market confidence.
Adding to this bearish sentiment, over $1.28 billion worth of short positions have been opened on Solana in the past week, compared to only $924 million in long positions. This imbalance signals that traders are expecting further downside in the near term.
Bull-Bear Power Weakens: Buy Interest Fading
Solana’s Bull-Bear Power Index has also been trending downward, indicating that buying pressure is drying up. Without aggressive buying during dips, the likelihood of a quick recovery is slim. This trend suggests the bulls are taking a pause, leaving room for bears to take control.
Critical Support Level: $175 Could Make or Break SOL
From a technical perspective, Solana is now testing crucial support around $175, based on the Fibonacci retracement from the $125 low to the $206 high. If this level holds, the token might consolidate before making another upward move.
However, if $175 is breached, it could lead to a deeper correction. Conversely, reclaiming $187 would be an early sign of trend reversal and could trigger fresh buying.
What’s Next for Solana?
While long-term fundamentals for Solana remain intact, short-term traders should brace for potential volatility. Market sentiment, SOPR trends, and liquidation data all point to a cautious phase ahead.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
