Solana Price Forecast: Is SOL facing greater downside risk after slipping below $92?

• Selling pressure keeps Solana below $92 on Wednesday as its correction deepens, taking losses so far this week to over 3.5%.
• SOL's recovery remains constrained by subdued ETF demand, a build-up in short positions and increasingly overheated market conditions.
• SOL remains exposed to a sharper correction as weakening technical signals point to additional downside risk.

Bearish sentiment continues to restrain Solana (SOL), which trades below $92 on Wednesday after losing more than 3.5% so far this week. Recovery efforts remain limited by subdued demand for US-listed spot Solana Exchange-Traded Funds (ETFs), an increase in short positions and overheated market conditions. Adding to the pressure, weakening technical signals suggest further downside risk and leave SOL exposed to a more pronounced correction.

Are weakening metrics holding back Solana’s recovery?

With losses exceeding 3.5% so far this week, Solana fell below $92 on Wednesday. The decline puts it on course for a sixth consecutive losing week since late September.

Following last week’s largest weekly withdrawals since launch, activity in SOL’s spot Exchange-Traded Funds (ETFs) has been largely muted so far this week, according to SoSoValue data. The figures suggest that meaningful institutional demand for the token is lacking, leaving falling SOL prices without support from ETF demand.

Bearish positioning is also evident in derivatives, with CoinGlass reporting a SOL long-to-short ratio of 0.92 on Wednesday, close to its lowest reading in over a month. Readings below one signal bearish sentiment, reflecting traders’ bets on a fall in asset prices.

A cautious picture also emerges from CryptoQuant’s summary data: large whale orders feature in SOL’s spot and futures markets, where sellers dominate. Overheating is evident in the spot market as well. Together, these indicators suggest a cautious, bearish bias among Solana traders that continues to constrain its recovery.

Solana technical outlook: Are bulls losing their grip?

Below its key Exponential Moving Averages (EMAs), Solana retains a bearish near-term bias while trading at $91.26 on Wednesday. Successive layers of overhead resistance come from the 50-day EMA at $102.78, the 100-day EMA at $99.61 and the 200-day EMA at $98.39, signalling that the recent decline remains intact. 

Weakness persists across momentum indicators. The Relative Strength Index (RSI) sits near 26 in oversold territory, while the Moving Average Convergence Divergence (MACD) line remains firmly below zero. Both reinforce the prevailing downward pressure, even as market conditions begin to appear stretched.

Any recovery would first encounter the horizontal resistance around $97.76, ahead of the 200-day EMA at $98.39 and the 100-day EMA at $99.61. A firmer hurdle lies at the 50-day EMA of $102.78, before the higher horizontal barrier at $122.76.

For a further decline, the current price region serves as the immediate reference point. The earlier rising trendline dynamics now lead back towards the break zone around $88.80, followed by more significant horizontal support near $78.35. Buyers would be expected to show greater interest at that lower level if the sell-off continues.

(The technical analysis of this story was written with the help of an AI tool. Know more.)