Solana (SOL), once a promising cryptocurrency, has seen its value nosedive in recent weeks, primarily due to a significant withdrawal of institutional investments. This downturn, despite the recent approval of a spot Solana ETF in Brazil, underscores the growing skepticism among large investors regarding the coin’s future.
The approval of the Brazilian ETF was widely anticipated to provide a boost to Solana’s price, as it represented a significant step towards mainstream adoption. However, the market’s reaction has been underwhelming, largely attributed to the ongoing trend of institutional investors pulling out their funds from Solana.
According to CoinShares, Solana experienced outflows of $38.9 million in the week ending August 17. This marks a significant decline in institutional confidence, particularly when compared to other cryptocurrencies like Bitcoin and Ethereum. The data suggests that Solana’s bearish sentiment has intensified, even surpassing that of these more established coins.
The withdrawal of institutional funds has exacerbated Solana’s price decline, which was already under pressure due to broader market trends. The Relative Strength Index (RSI) has fallen below the neutral line, indicating a loss of buying momentum and a potential for further price declines.
SOL Price Analysis
Solana’s price is currently hovering around the $150 mark, having failed to sustain a recent recovery from its July lows. While there is still some support at the $137 level, a break below this could lead to a further decline towards $126.
However, a potential recovery could materialize if Solana manages to reclaim the $156 level as support. This could pave the way for a rise to $169, offering some respite from the ongoing bearish trend.
Conclusion
Solana’s price is facing significant headwinds due to a combination of institutional pullback and broader market bearishness. Despite the recent ETF approval in Brazil, the market’s reaction has been muted, indicating a lack of confidence in the coin’s future. Investors should closely monitor Solana’s price action in the coming weeks to gauge whether a recovery is imminent or if further declines are on the horizon.