Since reaching its peak of $264.39, SOL has faced challenges and experienced a 13.20% decline over the last month, undoing previous gains. At the moment, it is trading at $209.44, reflecting a 2.93% decrease on the daily chart.
While heightened trading activity could point towards selling pressure, overall market sentiment hints at a potential bullish turnaround.
Analyzing Increased Trading Volumes and Their Impact on SOL
Recent data from Artemis shows a significant surge in daily transactions on the SOL network, reaching nearly 67 million transactions—a level not witnessed in recent times.
A notable increase in transaction volume can serve as an indicator of either positive or negative momentum for an asset, often influenced by price movements.
Despite SOL’s 2.93% price dip, the uptick in transactions may signal selling pressure. Nevertheless, the asset has entered a support zone on the weekly chart, historically associated with strong buying activity. This support level could pave the way for a potential price rebound in the near future.
Spot Conviction Shift Reflected in SOL Outflows
The significant outflow of SOL from exchanges indicates that spot traders are transferring assets to wallets, reflecting a potential long-term commitment amidst the recent market downturn.
Usually, spot traders deposit more assets into exchanges during such periods. However, the current trend of withdrawals suggests a heightened bullish sentiment.
Recent Exchange Netflow data shows a notable negative trend, with over $264 million worth of SOL leaving exchanges within the last 96 hours. In the past 24 hours alone, withdrawals amounted to $46.26 million, bolstering market resilience against further declines.
Moreover, the positive market funding rate at 0.0057% implies that bullish long traders are willing to pay fees to maintain equilibrium between spot and futures market prices.
If the pattern of increasing withdrawals and positive funding rates persists, SOL may be poised for a potential uptrend and new price highs.
Bullish Signals Emerge as Long Liquidations Lead to a Shift in Sentiment
In the past 24 hours, significant long liquidations amounting to $21.35 million have been recorded, indicating losses due to downward price movements against the positions taken by long traders.
While this could be viewed as bearish, signs of a gradual sentiment shift are visible on lower time frames.
Over the last 4 hours, short liquidations have surpassed $936,150 compared to long liquidations under $150,000, implying a shift towards bullish sentiment and a potential upward trend for the asset.
Additionally, Open Interest has increased by 0.62% in the same timeframe, reaching a total of $3.52 billion, signifying a growing bullish momentum with most derivative contracts favoring upward price movements.