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- Solana’s price dropped 7% to $152 on August 10 due to profit-taking after a 49% weekly rebound.
- Positive news from Brazil, including the approval of a Solana ETF, initially drove the price up.
On Saturday, August 10, Solana (SOL) experienced a notable decline in price, falling to $152, marking a 7% drop in just 24 hours. This retreat comes after a week of strong growth, with SOL’s price increasing by 49% in the last seven days.
As bulls take advantage of the dip, the market may signal a potential bear trap based on derivatives market data. The recent fluctuations in SOL’s price were due to technical analysis and market updates. The cryptocurrency started the week in the red zone after a severe drop of more than 11% that took place on August 5 due to a massive market crash.
Brazilian Regulators Approve Solana ETF and Boost Price
During the middle of the week, Solana had a rise following good news from Brazil. On August 8, the Brazilian Securities and Exchange Commission (CVM) greenlighted a Solana ETF, and this accelerated the price of SOL. This approval led to a 12% increase within 24 hours and created a solid support level at $150.
The ETF in Brazil will employ CME CF Solana dollar reference rates set up for the Chicago Mercantile Exchange. QR, a Brazil-based asset manager, will launch the ETF, while Vortax will be the manager of the ETF. This step allows Brazil to join the ranks of the countries that support cryptocurrencies, having invested in Ethereum and Bitcoin in the last three years.
The Brazilian approval of the Solana ETF increased the bullish sentiment as there were also rumors that VanEck’s Solana spot ETF application might be approved in the U.S., which positively affected SOL’s price.
Notably, the majority of short-term traders started to close their positions when SOL rose to $158 per week. The decision to take profit and the 49% price recovery from August 5 to August 9 caused a 7% price drop in the following 24 hours. This correction emphasizes the fact that the market is easily influenced by short-term changes and speculative trades.
Open Interest Remains Resilient
During the price adjustment, the open interest in Solana’s futures contracts has remained stable. Open interest, which is the total number of contracts outstanding, was still over $2 billion. From August 8 to August 10, SOL’s open interest fell slightly from $2. 25 billion to $2. 20 billion, a 2. 2% decrease, while SOL’s price fell by 7%.
The comparatively gradual decrease in open interest when compared to the price decline indicates that many traders do not see the current correction as the beginning of a bear market. The continued high open interest above $2 billion suggests that traders are willing to hold on to their positions, and this might be a bear trap situation in which the market might reverse.
The steady open interest indicates that long traders are now patiently waiting for the next market-triggering event at the $150 level. This indicates that the recent correction may not be the end of the upward trend if the support levels are maintained.
