Bitcoin Falls Below 100K, Solana (SOL) Tumbles to Historic Lows

Bitcoin's collapse below $100,000 shook Solana (SOL), bringing it below the key support of $200. What scenarios await the market?

Solana (SOL), a major player in the cryptocurrency sector, suffered a sharp drop in price, penetrating the critical $200 support level and reaching an all-time low.

This drop can essentially be attributed to the bearish sentiment prevailing in the digital asset market, mainly influenced by the descent of the Bitcoin below the $100,000 mark.

The drop in demand for Solana is due to the fact that over $365 million of SOL has been sold on the market in the last 3 days.

Solana is directly linked to Bitcoin and is experiencing selling pressure from traders. Investors are reacting to the drop in the price of Bitcoin and since the famous coin has fallen below the $100,000 mark, investors have focused their openness towards the altcoin.

This is because of the steady outflows from Solana's spot market, which, according to Coinglass, have reached a total value of $367 million.

SOL Inflows/Outflows: Source From Coinglass

When a digital asset experiences continuous outflows from the market, it means that investors are withdrawing the asset rather than buying it. This leads to a decrease in demand and signals a bearish trend.

According to Monday's long/short ratio chart, Solana's bearish trend was confirmed. At that time, the ratio was below 0.93.

SOL Long/Short Ratio: Source from Coinglass

The ratio compares the two sides of the trend: the short position, which bets on a fall in the price of the token, and the long position, which bets on a rise. As for Solana, the ratio shows a value of less than 1, indicating that there are more short positions than long ones.

According to the price chart, Solana's CMF (Chaikin Money Flow) is on the zero line, signalling strong selling. The Chaikin Money Flow (CMF) indicator is a key tool in technical analysis, useful for measuring the buying and selling pressure of a digital asset. When the CMF value falls below zero, it means that the asset is experiencing negative cash flow, indicating selling pressure in excess of buying interest.

This situation suggests that more investors are selling their positions than are buying the asset.

If the current trend continues, the SOL price could fall as low as $187.71. However, should demand for the currency increase, the bearish trend could end, allowing the price to rise again to $229 or more.