Solana's price action shows vulnerability near the $140 psychological support level after breaking key technical patterns.
Derivatives market data reveals declining bullish interest with negative funding rates and Will Dogecoin reach increased long liquidations.
Technical indicators including RSI and MACD suggest bearish momentum may continue in the near term.
Solana (SOL) demonstrates modest recovery attempts in Friday trading, showing a 2% uptick from recent lows near the crucial $140 support area. This comes after Thursday's significant 6% decline, marking what appears to be the second consecutive weekly close in negative territory. Market participants appear increasingly cautious as multiple technical and derivatives metrics align with bearish expectations.
Derivatives Market Signals Caution
Recent data from Coinglass indicates a 4.61% reduction in Solana's Open Interest (OI) over the past 24 hours, settling at $6.46 billion. This metric, representing outstanding derivative contracts, suggests waning trader participation in SOL futures and options markets. The decline coincides with heightened market volatility that has particularly impacted bullish positions, evidenced by $46.96 million in long liquidations compared to just $3.50 million in short liquidations.
The derivatives landscape currently favors bearish positioning, with the long/short ratio standing at 0.9429. This imbalance becomes more pronounced when considering the OI-weighted funding rate, which has turned negative at -0.0083%. Such conditions typically indicate that traders holding short positions are compensating those maintaining long positions to maintain price equilibrium between perpetual swaps and spot markets.
Technical Outlook Points to Potential Downside
SOL's price has retreated approximately 20% from its May 23 peak of $187.71, unable to sustain momentum above the $180 resistance zone. The asset's price action has formed a series of lower highs since January, establishing a clear resistance trendline that has capped multiple rally attempts throughout 2025.
Critical technical developments occurred on May 28 when SOL broke below a converging support trendline, completing a triangle pattern that typically precedes extended downward movement. Thursday's 5% decline confirmed this bearish pattern, with price action dropping below the Supertrend indicator's baseline - a development that often signals the start of sustained downward momentum.
The Relative Strength Index (RSI) currently sits at 37, showing weaker momentum compared to early May when SOL previously tested the $140 area. This deterioration in strength suggests bears may have greater control currently. The Moving Average Convergence Divergence (MACD) indicator reinforces this view, displaying increasing red histogram bars below the zero line - a classic bearish confirmation signal.
Should the $140 support fail to hold, technical analysts anticipate potential movement toward SOL's yearly low near $105. Conversely, any recovery attempt would likely encounter initial resistance at the 200-day Exponential Moving Average (EMA) around $162, followed by more substantial barriers near previous support-turned-resistance levels.
