Is Solana price dropping under $100 in September?

SOL closed with its second-worst weekly return in 2024, at 19.14% in late August. The previous largest weekly negative ROI of 25.19% was recorded a month earlier in July.

Solana OI is up 20% as funding rate is negative.

With SOL posting $500 million in negative spot net flow in August, the derivatives market is taking charge of pricing for now.

Note that last week, Solana open interest (OI) fell 12% in the 24 hours after prices dipped below $150. Since then, prices have fallen another 14%, but open interest in the markets has risen 20%.

The increase in open interest during a market decline signals aggressive short-term selling by futures traders. The negative funding rate further confirms the bearish bias. The ratio has remained negative for the past week, the highest since October 2023. The current funding rate of -0.001 is the lowest in 2024.

SOL Weekly DEX Volume Drops to 6-Month Low

Solana has seen a decline in online activity over the past month, with some of the memecoin euphoria fading. According to Dune Analytics, weekly DEX volume was $7.7 billion last week, a 6-month low for the ecosystem.

In March, Solana’s DEX daily volume was 50% larger than Ethereum’s, with 24-hour trading volume regularly crossing the $3 billion mark. “The SOL/BTC chart looks completely unfavorable,” the analyst notes.

In 2024, the Solana/Bitcoin correlation has been gradually increasing, allowing the altcoin to outperform BTC in Q1 2024. With markets moving lower over the past few weeks, this correlation has held up, meaning the altcoin is seeing bigger drawdowns than Bitcoin.

Independent trader Bluntz_Capital reports that SOL/BTC is likely heading for another major decline.

In his research post, X noted:

“sol/btc looks pretty bad on the weekly chart, while the official market looks good to me, with the right sentiment and everything.”

Solana Price Faces Critical Support at $127

Ahead of a retest of $100, the closest major support level is at $127.

Since April 2024, Solana has briefly fallen below $120 six times, but each time the altcoin managed to close the daily price curve above $127, which is also the lower boundary of the accumulation zone. The difference this time is that SOL has lost support from the 200-day SMA.

Previously, when the price closed above $127, it also recorded a daily close above the 200-day SMA.

This is the first time since September 2023 that SOL has closed below the EMA for multiple days, further highlighting the bearish chart structure.

If Solana breaks below $127, the immediate target will be $110, meaning liquidity is squeezed out of the altcoin. The ideal scenario for the bulls would be a pullback from $110.

However, if September is an extended bearish period for the market, SOL could potentially retest the demand zone between $98 and $104.

The worst-case scenario for SOL could be a retest of $100, which would mean a 22% correction and a new floor for the altcoin.

So, if Bitcoin continues its bullish run in Q4, Solana price should not fall below $100 in September.