Solana (SOL), which gained prominence as both a network and a native token last year and in the first quarter of this year, has struggled to maintain its strength amid a significant market downturn. Over the past week, Solana has experienced a dramatic 20% decline, triggering panic among institutional investors who have been withdrawing their investments from the digital asset.
Institutional Withdrawal Impacts
Despite a recent 10% price increase to $145, Solana still reflects a 20% fall over the last seven days, with its price dropping to $110 due to intense selling pressure in the market. Institutional investors have played a crucial role in this scenario. According to CoinShares data, institutional investors withdrew over $528 million from cryptocurrencies last week, with Solana witnessing a $2.8 million outflow.
In addition to Solana, Bitcoin and Ethereum also faced significant outflows, while other cryptocurrencies remained relatively stable. Although no new updates regarding institutional investments have emerged in the past three days, the increasing selling pressure is evident. Nonetheless, today’s price surge could potentially curb this trend and discourage further selling.
Can Solana Rebound?
The recent sharp decline in Solana’s price has disrupted the double-bottom bull formation, which had projected a potential rise to $245, equating to a 31% rally. However, Solana failed to break out and is currently trading at $145. Despite this, the altcoin has managed to stay above the critical support level of $126, indicating a possible recovery.
Should the price hold above this support, Solana may target the $156 resistance level. Additionally, if institutional investors halt their selling activities and resume buying, Solana’s price could surpass $156.
Key Takeaways for Investors
- Monitor the $126 support level closely; staying above this can signal potential recovery.
- Institutional investment behavior significantly impacts Solana’s price movements.
- Current market conditions emphasize the importance of cautious and strategic investment decisions.
In conclusion, while Solana faces substantial market challenges, today’s gains could offer a glimmer of hope. Investors should keep a close eye on institutional activity and key support levels to navigate this volatile period effectively.