Solana (SOL) extended its losing streak on Friday, breaking below the psychologically important $90 level to trade around $89.65 — its weakest price in two months. The drop of more than 6.5% came amid a broad cryptocurrency selloff that triggered over $1 billion in liquidations across the market.

Institutional demand also showed signs of strain. Solana-focused exchange-traded funds (ETFs) recorded fresh withdrawals following last week's substantial outflows, while derivatives traders continued to trim exposure to SOL. Futures open interest declined, and leveraged long positions accounted for the majority of Thursday's liquidations.

The combination of weakening institutional flows, fading 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.

ETF outflows signal weakening institutional demand

Institutional appetite for Solana remains subdued as investors cut exposure to risk-sensitive assets amid broader financial market uncertainty. Because ETFs hold SOL on behalf of shareholders and can be traded through standard brokerage accounts, their daily flow data is widely tracked as a proxy for institutional positioning in the token.

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 stretch for Solana investment products: last week, SOL ETFs posted $71.47 million in net outflows, their largest weekly withdrawal on record.

Persistent outflows can indicate that investors are reducing positions, potentially weakening a source of demand for the underlying asset. Daily flow reports from upcoming trading sessions will offer a reading on whether that demand pressure eases.

Derivatives data points to reduced positioning

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% over the last 24 hours. A decline in OI typically indicates that traders are closing positions or reducing market exposure.

Solana's sharp decline on Thursday likewise triggered substantial liquidations across its derivatives market. CoinGlass data shows 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, while short liquidations accounted for the remaining $3.64 million. Liquidations occur when exchanges automatically close leveraged positions whose losses exceed margin requirements, so the long-heavy split shows that traders betting on further gains bore most of the forced exits as prices fell.

Technical outlook: Death Cross threatens further losses

Solana's technical structure continues to favor sellers, with the cryptocurrency trading 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, suggesting the broader price structure stays 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 pattern known as a Death Cross, often interpreted as confirmation of weakening price momentum. Because moving averages are derived from past prices, the pattern functions as a lagging signal of an established downtrend rather than a forward-looking forecast.

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

Momentum indicators reinforce the negative setup

Solana's momentum indicators reinforce the negative technical outlook. The daily Relative Strength Index (RSI) stands at 31, 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.

Together, the RSI and MACD readings suggest bearish momentum remains dominant, and buyers have yet to establish a convincing recovery.

Potential recovery scenario

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, a level made particularly important by its proximity to 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. Whether the potential Death Cross crossover completes, and how ETF flows develop in coming sessions, will provide additional checkpoints for the evolving setup.

Source: originally reported by Invezz. 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.