Concerns arise as a whale transfer of Solana (SOL) tokens to Coinbase coincides with a bearish setup in the market. The transfer of 200,345 SOL, worth over $31 million, raises speculation of potential selling pressure. Large transfers to exchanges often precede sell-offs as investors liquidate their holdings. If the SOL tokens are sold, it could exert significant downward pressure on the price, especially considering the transaction size relative to Solana’s daily trading volume.
Adding to the bearish sentiment is the formation of a descending triangle pattern in the SOL/USD pair. This bearish technical setup features a declining upper trendline and a flat lower trendline as weakening support. The pattern indicates intensifying selling pressure, resulting in weaker rallies and struggles to breach resistance. Traders estimate a potential downside of over 51% if the bearish setup is confirmed, with the SOL/USD pair reaching a target near $3.52. A breakout below the pattern could have catastrophic consequences for SOL, potentially leading to significant losses.
Despite these bearish signals, Solana’s market fundamentals display strength. The funding rate, a key indicator of market sentiment in futures trading, has remained largely positive, reflecting a bullish outlook among futures traders. Open interest in Solana futures has also been increasing, suggesting growing participation and the entry of new capital. This indicates that investors are positioning themselves for further price gains in Solana.
Furthermore, the approval of the world’s first Solana spot ETF by the Brazilian Securities and Exchange Commission (CVM) adds to the positive momentum. Developed in partnership with CME Group, the ETF will use the CME CF Solana Dollar Reference Rate as its benchmark. This approval not only legitimizes Solana in the eyes of institutional investors but also paves the way for greater capital inflows from the traditional finance sector. Brazil’s initiative aligns with the global trend of regulators proposing similar products, which could benefit the cause of Solana ETFs worldwide.