Will Solana (SOL) Price Fall Further in October 2024?

The so-called ‘Uptober’ has started on a very negative note for cryptocurrencies. Solana (SOL), one of the top-ranking cryptocurrencies, has declined by over 14% month-to-date and was trading for as low as $135.25 on Oct. 3.

At the core of these declines is a mix of geopolitics and Solana’s own shortcomings highlighted by a well-renowned security expert. In addition, technical setups have psychologically favored bears recently, dampening the upside sentiment in the Solana market.

Why is Solana Price Falling These Days?

SOL’s losses are part of a downtrend across the risk-on market, including stocks and cryptocurrencies. Traders have been reducing their exposure to riskier assets due to rising Middle East tensions caused by tit-for-tat military attacks between Israel and Iran/Hezbollah.

Instead, the capital is flowing toward what is considered the safest haven asset: the U.S. dollar, which was delivering its fourth consecutive bullish daily session as of Oct. 3.

Comments from former NSA contractor Edwards Snowden have worsened Solana’s upside prospects. Speaking at the recent Token2049 event, Snowden accused Solana developers of sidelining the core concept of blockchain technology—centralization—to boost transaction speeds and lower costs.

He further noted that nobody is using blockchains like Solana except scammers and memecoin developers, adding that “if anybody puts anything significant on Solana […], then it’s going to be a system with leverage that people can just take” from its community.

De-risking is further visible in Solana’s derivative markets. As of Oct. 3, the open interest (OI) in the Solana Futures was around $2.21 billion, down from $2.63 billion two days ago. Meanwhile, its funding rates (per eight hours) have also declined from 0.0127% to 0.0032% in the same period.

The falling OI indicates traders have reduced their positions in more volatile assets like Solana. At the same time, lower funding rates suggest that traders are less willing to pay a premium to maintain long positions, signaling a weakening confidence in future price appreciation.

Will Solana Price Fall Further or Recover in October?

Solana’s price is currently trading within a falling wedge pattern. While traditionally a bullish reversal pattern, the current structure still suggests a continuation of the downtrend as long as the price remains within this range.

Key Fibonacci retracement levels further suggest potential downside targets.

Notably, Solana’s price is hovering around the 0.236 Fib level near $134.12. If the falling wedge consolidation continues, Solana could test lower Fib levels, particularly the 0.0 retracement level at around 110.70.

Conversely, a breakout above the wedge’s upper trendline could result in an extended rally toward the $180-219 trading range in October. This target area is determined by measuring the maximum distance between the wedge’s upper and lower trendlines and adding the outcome to its potential breakout point.