Why is Solana crashing below $90 as ETF outflows and bearish signals mount?

Solana SOL extended its losing streak on Friday, falling below the psychological $90 level to trade around $89.65, its lowest price in two months.

The decline follows a drop of more than 6.5% on Friday as a broad cryptocurrency selloff triggered over $1 billion in liquidations across the market.

Institutional demand also showed signs of weakness, with Solana-focused Exchange-Traded Funds (ETFs) recording fresh withdrawals after last week's substantial outflows.

Meanwhile, derivatives traders continued to reduce their exposure to SOL, with futures Open Interest declining and leveraged bullish positions accounting for most of Thursday's liquidations.

The combination of weakening institutional flows, declining derivatives activity, and deteriorating technical indicators leaves Solana vulnerable to further losses.

A decisive break below the $87.21 support level could expose the next major downside target near $70.58.

Solana ETF outflows signal weakening institutional demand

Institutional appetite for Solana remains subdued as investors reduce exposure to risk-sensitive assets amid broader financial market uncertainty.

According to SoSoValue, US-listed SOL-focused ETFs recorded $1.18 million in net outflows on Thursday, ending three consecutive trading days without reported net flows.

The withdrawals follow a difficult period for Solana investment products. Last week, SOL ETFs experienced $71.47 million in net outflows, their largest weekly withdrawal on record.

Persistent outflows can indicate that investors are reducing their positions, potentially weakening a source of demand for the underlying asset.

Derivatives market data also points to weakening confidence in Solana's near-term outlook.

According to CoinGlass, SOL futures Open Interest (OI) declined to $5.38 billion on Friday, down 8% in the last 24 hours. 

A decline in OI typically indicates that traders are closing positions or reducing their market exposure.

Finally, Solana's sharp decline on Thursday triggered substantial liquidations across its derivatives market. CoinGlass data shows that approximately $43.85 million in SOL futures positions were liquidated during the session.

Of that amount, $40.21 million came from long positions, representing nearly 92% of the total. Short liquidations accounted for the remaining $3.64 million.

Solana technical outlook: Death Cross threatens further losses

Solana's technical structure continues to favor sellers as the cryptocurrency trades below major moving averages.

At approximately $90.06 on Friday, SOL is extending its sixth consecutive week of losses. The token remains below its 200-day Exponential Moving Average (EMA), currently positioned near $99.62.

Trading below this longer-term indicator suggests that the broader price structure remains weak. Meanwhile, the 50-day EMA has declined toward $101.92 and is approaching the 200-day EMA. 

If the shorter-term moving average crosses below the longer-term indicator, it would form a bearish technical pattern known as a Death Cross. Such a crossover is often interpreted as confirmation of weakening price momentum.

Solana is currently testing a long-term ascending support trendline connecting the lows recorded on June 6 and June 25.

The trendline is positioned around $89.83, placing SOL near an important technical decision point.

A sustained breakdown below this support could expose the horizontal level at $87.21. This area represents the next immediate downside barrier for sellers to overcome.

If SOL closes decisively below $87.21, bearish momentum could accelerate toward $70.58, a support level last tested on August 1.

Solana's momentum indicators reinforce the negative technical outlook. The daily Relative Strength Index (RSI) stands at 31, placing slightly above the commonly watched oversold threshold of 30.

Meanwhile, the Moving Average Convergence Divergence (MACD) indicator continues to decline below its signal line in negative territory.

The configuration suggests that bearish momentum remains dominant. Together, the RSI and MACD readings indicate that buyers have yet to establish a convincing recovery.

Despite the bearish outlook, Solana could attempt a recovery if buyers defend the nearby ascending trendline.

An initial rebound would need to establish support above the $89–$90 region. The next major resistance lies at the 200-day EMA around $99.62.

This level is particularly important because it sits just below the psychological $100 mark. A sustained move above $99.62 could improve short-term sentiment and bring the 50-day EMA at $101.92 into focus.

Reclaiming both moving averages would represent a meaningful improvement in Solana's technical structure.

AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.