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SOL has been struggling recently, with its price facing downward pressure. According to CoinMarketCap, SOL has plummeted by 17.49% over the last seven days, currently trading at $131.80. The whole crypto market has been facing bearish sentiment, which has also weighed heavily on Solana's price.
Despite the negative trend in SOL’s price, the NFT market on Solana has shown mixed signals. Data from DappRadar highlights that collections such as Frogana, SMB Gen 2, De Gods, Madlads, and Unicornio were among the top-performing NFT collections on Solana over the past 30 days.
However, Solana’s overall NFT metrics took a hit in August. CRYPTOSLAM reported a sharp decline in the number of NFT buyers and sellers, dropping by 36% and 33%, respectively. Additionally, total transactions on the Solana blockchain fell to just over 1 million, marking a 50% decrease.
Despite these declines, the past week has shown some hope for Solana’s NFT market. The NFT sales volume on Solana surged by 2.7%, reaching $18 million. Moreover, the number of NFT buyers and sellers on the blockchain also increased by 40% and 27%, respectively, indicating a potential recovery in September.
Amid the bearish sentiment, there has been a rise in open interest for SOL. This increase in open interest is largely driven by an influx of short positions, suggesting that many traders are betting against SOL's price. Typically, a rise in open interest indicates new money entering the market, which can either reinforce existing trends or signal a change in market sentiment. In this case, the predominance of short positions points to an expectation of further price declines.
The correlation between Solana’s price trajectory and the surge in open interest is particularly notable. As the price of SOL continues to dip, more positions are being opened, emphasizing traders' belief that the token could face additional losses in the near term. This has created a tense atmosphere in the market, with participants closely monitoring any potential market reversals.
From a technical analysis point, SOL has closed bearish for eight consecutive days, reflecting the ongoing downward momentum. However, a positive development has emerged on the 1-hour timeframe, where Solana has broken above a descending trendline.
If this breakout holds, it could signal a potential reversal, with the price likely to trade back above the $150 level.
