Solana has been crashing throughout the past two months despite funds flowing into its exchange-traded funds (ETFs). After hitting its 5-month low at $136, the coin is at risk of falling to its seven-month low around $105.
Solana is currently priced at $136, after it went through a week of a roller coaster ride, hitting $260 and then falling as low as $136. Volatility has been high, and the coin has now gained around 5% during the past 24 hours. The daily trading volume of the coin hit $5.24 billion, an increase of 18%, as traders showed interest in the coin.
Unfortunately, Solana crashed despite funds flowing into its staking ETF. According to SoSoValue, an analytical platform, Solana spot ETF hit a daily net inflow of $58 million from $10.5 million last Friday, while its cumulative inflow reached $568 million. However, this increment in funds flowing into the ETF was not reflected in the coin’s price.
There could be many reasons for this. For instance, ETF issuers usually hold Solana; however, some of the issuers might use futures, derivatives, or borrow coins rather than adding fresh demand. Or it could be that they hold spot SOL; however, the buying may already have been priced in by the market.
And don’t forget it was SOL staking ETFs that drew funds, so the product gives yield (staking rewards), then part of the “value” shift is accruing as yield, not necessarily coin price appreciation.
So what’s happening with Solana’s price?
In the chart below, Solana is trading inside the falling wedge, which eventually would break out, reaching higher. However, whether the breakout would happen or not is questionable, as a death cross occurred. When the 50-day moving average that is above the 200-day moving average crosses it, a death cross occurs. Usually, a death cross is followed by crashing prices.
After suffering the crash, SOL is currently holding support near $126, a five-month low. However, the falling wedge pattern is not complete; hence, there is a high chance that Solana will continue falling until $105, its 7-month low, before it rebounds.
