On Monday, Solana (SOL) dropped to a two-month low, following a broader sell-off in the cryptocurrency market triggered by Bitcoin‘s dip. Although SOL has experienced a minor rebound of 2%, its impact is still substantial, as over $21 million worth of long positions were liquidated within the last 24 hours.
With strengthening bearish pressure, long positions in the SOL futures market remain at risk.
Solana Long Traders Count Their Losses
On Monday, the price of SOL dipped to a 68-day low of $168.88 during regular trading hours. This drop was largely due to Bitcoin falling below the crucial $90,000 support level, which in turn triggered selling pressure. Although SOL has managed to regain some ground since then, its derivatives market is still experiencing high levels of forced liquidation.
As a crypto investor, I’ve noticed that over the past 24 hours, the Solana market has seen a staggering $25.48 million worth of liquidations. Out of this, long positions accounted for approximately $21.38 million, while short positions only amounted to around $4.10 million.
Liquidation happens when the value of a trader’s asset decreases, causing their position to go against them. If the trader doesn’t have enough resources to keep up with this loss, their position will be forcibly terminated.
Just like SOL, long-term investors might be forced to sell their assets for less than they initially bought due to covering their losses as the price decreases. This often happens when the asset’s value drops below a specific point, causing those who speculated on a price rise to leave the market.
As a result of this situation, SOL’s derivatives traders are now closing their trades. This is indicated by the decreasing number of open positions, which in the last 24 hours has fallen by 3.47%.
Monitoring open interest gives us the count of all unresolved futures and options agreements that haven’t been settled yet. When we notice a decrease in an asset’s open interest, it means traders are wrapping up their positions, which might suggest less market activity and a possible drop in the asset’s worth.
SOL Price Prediction: The $188.96 Resistance Is Key
As bearish forces grow stronger, there’s a possibility that Solana (SOL) might find it difficult to surpass the crucial resistance point at $188.96. If selling intensifies and SOL continues its descent, its value could plummet to around $170.41. This situation could potentially lead to more long positions being liquidated.
If optimism grows about the coin and it manages to surpass $188.96, it might head towards $218.90.
Should bullish feelings intensify and the coin goes past $188.96, it may aim for $218.90.
Or simply: If the coin breaks above $188.96 due to increased optimism, it could reach $218.90.
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2025-01-14 16:28