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Solana price eyes 15% pullback as institutions slow down investment in SOL

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  • Solana price is hovering above the 50% retracement level at $216, hinting at a move lower.
  • A downswing is likely to knock SOL down to sweep the range low at $186.
  • A daily close above $246 will invalidate the bullish thesis.

Solana price is consolidating around the trading range’s midpoint, suggesting it could follow the general trend and head lower. This move will reset the selling pressure and will allow buyers an opportunity to make a comeback.

SOL inflows depreciate week-over-week

Institutional participants investing in Solana seem to have taken a hit over the course of the last two weeks, according to a recent report from CoinShares. Solana has seen a total inflow of $43 million over the last month. In contrast, Cardano saw a $2.1 million outflow.

While Bitcoin hogs the top spot, last week saw a decrease in the inflow from $9.8 million to $8.5 million. This 13.2% decline suggests that institutional investors are looking elsewhere. 

Institutional inflows chart

Institutional inflows chart

Bitcoin seems to be attracting more eyes as the total inflows went from $97.5 million to $114.4 million. This 17.3% uptick suggests that interested parties could be looking to buy the dip.

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Ethereum continues to dominate in the world computer category, with inflows last week totaling up to $12.6 million. Still, Ethereum-killer Solana seems to have siphoned off a majority of the interest as its inflow stands at $8.5 million.

While the monthly inflows remain primarily on the bullish side, the short-term outlook remains bearish, much similar to what the technicals indicate.

Solana price eyes lower support levels

Solana price attempted a rally on November 18 to surpass the November 15 swing high at $246 but failed to do so. This move led to an 8% downswing to where SOL currently stands – $216. A breakdown of the 50% retracement level at $216 will trigger a downtrend and likely knock Solana price down to the range low at $186. This retracement could face a momentary pause at the $200 psychological level, but investors can expect SOL to dip below the range low at $186 to collect the ‘sell side’ liquidity.

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In a special case scenario, investors can expect SOL to retest the 70.5% Fibonacci retracement level at $233 before it heads lower to shatter the $216 support barrier. Either way, a 15% downswing seems likely from the current position. 

Therefore, market participants should pay close attention to the $216 support floor, which will make or break the situation.

SOL/USDT 6-hour chart

SOL/USDT 6-hour chart

Regardless of the bearish narrative of the crypto market, if Solana price manages to move higher and produce a higher high above $233, it will indicate a weakness among buyers. However, a daily close above the range high at $246 will invalidate the bearish thesis.

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In such a case, Solana price could continue its uptrend to retest the all-time high at $260.

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Solana

Solana Forecast SOL/USD December 8, 2021

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SOL/USD are traded at 198.48 and continue to move as part of a bullish correction and a downward channel. Moving averages indicate a short-term bearish trend in Solana. Prices are bouncing again from the area between the signal lines, which indicates pressure from the sellers of the asset and a potential continuation of the fall from the current levels. At the moment, we should expect an attempt to develop a correction in the value of a digital asset and a test of the resistance level near the 210.55 area. Where can we expect a rebound again and the continuation of the fall in the Solana rate with a potential target below the level of 155.05.

Solana Forecast SOL/USD December 8, 2021

A test of the trend line on the relative strength index (RSI) will be in favor of falling quotes and the SOL/USD rate. The second signal will be a rebound from the upper border of the descending channel. Cancellation of the coin falling option will be a strong growth in the value of the asset and a breakdown of the 245.05 area. This will indicate a breakdown of the resistance area and continued growth in the cryptocurrency rate with a potential target above the level of 285.05. With the breakdown of the support area and closing of quotations below the level of 165.05, we should expect confirmation of a fall in the price because the breakdown of the lower border of the descending channel will take place.

Solana Forecast SOL/USD December 8, 2021

Solana Forecast SOL/USD December 8, 2021 suggests an attempt to correct and test the resistance area near the level of 210.55. Where can we expect a rebound and the continuation of the fall of SOL/USD to the area below the level of 155.05. An additional signal in favor of reducing Solana will be a test of the trend line on the relative strength index (RSI). Cancellation of the fall option will be a strong growth and a breakdown of the 245.05 area. This will indicate a continued rise in the cryptocurrency with a target above the level of 285.05.

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Solana price eyes 25% gains as SOL slows down its retracement

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  • Solana price is likely to rally 25% from its current position and retest the $240 level.
  • However, bears might push SOL below the weekly low at $176 before buyers trigger a 35% ascent to $240.
  • A swing low below $163 will invalidate the bullish thesis.

Solana price performance has been falling short of late, especially after the December 4 flash crash. But things could be due for a change as SOL presents a buy opportunity that might get more attractive if trapped bears decide to join the party.

Solana price vies to retest old highs

Solana price rose 14% to set up a swing high at $204 between December 6 and December 7. This run-up failed to collect the liquidity resting above $207 and has since retraced 6% to where it currently trades – $190.

Depending on where bulls decide to make a comeback, SOL looks to sweep the swing high at $240 and collect the buy-stop liquidity resting above it. From the current position, this run-up would constitute a 25% ascent.

However, there is a chance that investors might not be done booking profits. In such a situation, Solana price might decide to sweep the weekly low at $176 before it triggers an upswing. In this situation, SOL will aim for a 17% climb to $207. If the buying pressure continues to pour in, the “Ethereum killer” could make its way to $228 and, eventually, the $240 hurdle. In the latter scenario, a move from $176 to $240 would represent a 35% gain for SOL.

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SOL/USDT 4-hour chart

SOL/USDT 4-hour chart

While things are looking up for Solana, a breakdown of the $171 support floor will indicate that buyers are taking their sweet time to make a comeback. As long as the bullish momentum kick-starts here, SOL is in the safe zone. However, if the bears decide to knock SOL down to produce a swing low below $163, it will invalidate the bullish thesis outlined above.

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$2.6 Billion Bug in Solana Program Library Disclosed: Details

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Researchers from Neodyme, a boutique team focused on security audits, noticed a critical vulnerability in Solana’s codebase

In their latest blog post, crypto security researchers from Neodyme shared the design of an attack that may be profitable for “expensive” tokens integrated into Solana (SOL) ecosystem.

“One Lambo per hour”

As per the announcement shared in Neodyme’s social network and blog, its members noticed a bug in the token-lending contract of the Solana Program Library. As such, it affected numerous Solana-based DeFi protocols.

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Aggregated total value locked (TVL) at risk was over $2,600,000,000. The design of the hypothetical attack was quite simple: while depositing n fractional tokens, a user is able to withdraw n+1 fractional tokens.

With Solana’s native token, SOL, it will not be effective economically, as 1 Lamport (the smallest fraction of SOL, like Satoshi for Bitcoin, Wei for Ether and Drop for XRP) is only worth about $0.000000220.

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However, for Ether and Bitcoin, this scenario can be very profitable. With some technical upgrades, the attack can be executed about 300 times per second. In this case, losses can be dramatic:

We can get this transaction included about 300 times per second, stealing $7500 per second or about $27 million an hour (that is one Lamborghini Huracan every minute).

Bug fixed

In automated mode, this attack becomes profitable even for FTT and RAY tokens.

On Dec. 2-4, Neodyme’s representatives contacted a number of decentralized finance protocols (DeFis) on Solana, e.g., Larix, Solend, Tulip, Accumen, Soda and so on.

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All teams fixed the bugs in their architecture. Yesterday, software engineer Jordan Audet-Sexton shared in GitHub that the issue is fixed in Solana’s main codebase as well.

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