Can SOL End May Bullish Amidst The Current Correction Ahead of Consensus 2024?

Solana (SOL), the high-performance blockchain protocol, has been on a remarkable run since the start of the year, with its token SOL surging over 58% from a low of $118 on May 1st to a high of $188 on May 20th. However, the past week has seen a pullback, with SOL dropping over 6% in the last seven days leading up to press time statistics.

At a price of $168 as of writing, SOL is trading near the 38% Fibonacci retracement level from its recent rally, raising questions about whether the bullish momentum can be sustained or if further downside is likely.

SOL Technical Analysis: SOL Correction Continues?  

A closer look at the technical indicators suggests that the bearish pressures are mounting, at least in the short term. The daily Relative Strength Index (RSI) for SOL currently stands at 54, indicating a shift away from overbought conditions and a potential buildup of bearish momentum.

Despite this, the long-term outlook for SOL remains bullish, with the Futures Open Interest (USD) on the token soaring to an all-time high recently and now recording $2.43 billion. This metric, which measures the total number of outstanding derivative contracts, has consistently grown over time, soaring from below $1 billion in January.

A high open interest often indicates an influx of new traders entering the market using futures contracts, which can lead to increased volatility as these traders place bets on SOL's future price movements.

The decreasing long/short ratio for SOL further highlights the bearish sentiment due to the correction in the short term, suggesting that more traders have been taking short positions in anticipation of a potential price decline.

In other news, Solana is gearing up for a major presence at the upcoming Consensus 2024 conference in Austin, Texas, from May 29th to 31st. The Solana community will host a three-day hub featuring various speakers, developer workshops, and panels showcasing some of the leading projects built on the Solana ecosystem, such as Wormhole, Jito, and Pyth Network (PYTH).

This event could reignite interest and attention around Solana, driving renewed bullish momentum for the SOL token.

As the correction continues, market participants remain divided on the near-term outlook for SOL. While some see the current pullback as a healthy consolidation phase after the recent rally, others view it as a potential precursor to a more significant downside.

Investor sentiment, as reflected by the decreasing long/short ratio, is leaning towards a bearish bias in the short term. However, the sustained growth in Futures Open Interest suggests that there is still considerable interest and participation in the SOL market, which could fuel further price appreciation.