- SOL contracts surpassed $5 million with longs taking a larger share
High areas of liquidity existed between $138 and $140, indicating that the price might fall to these levels
As a researcher with extensive experience in cryptocurrency markets, I find the recent Solana [SOL] price action intriguing. Based on Coinglass’s liquidations data and AMBCrypto’s analysis, it appears that long positions accounted for a significant portion of the $5.47 million worth of total SOL liquidations in the last 24 hours.
Traders who wagered on Solana’s price increase in the past 24 hours have experienced a disappointing turn of events, as indicated by Coinglass’s liquidation statistics.
Based on data from the derivatives information portal, the aggregate liquidation figure for SOL came in at approximately $5.47 million. Of this amount, long positions accounted for around $4.3 million, while short positions managed with roughly $1.11 million.
Positive expectations did not pay off
When a trader fails to maintain sufficient collateral to cover their open contract due to market fluctuations, liquidation ensues. In this scenario, the exchange forcibly closes the trader’s position to prevent potential greater financial damage.
As a crypto investor, I can explain that long positions represent my belief that the price of a particular cryptocurrency will increase, and I aim to profit from this potential price rise. Conversely, shorts are bets that the price will decline, allowing me to profit when I cover my short position at a lower price than I initially sold it.
On the 27th of June, there was a significant surge in the price of Solana’s altcoin, reaching $150. This rise came following news that a financial firm had applied for an Exchange-Traded Fund (ETF) focusing on Solana’s native token, SOL. The announcement sparked optimistic reactions from the community on social media, with users encouraging SOL to build upon its upward trend.
Despite the expected price surge, Solana’s cryptocurrency took a different turn. Following the upward trend, it started to gradually decline on the price chart.
At the current moment of reporting, Solana’s price stood at $141.96 after experiencing a 2.39% decrease within the previous 24 hours. However, contrary to this downward trend, Solana’s funding rate indicated that traders remained optimistic, as some continued to uphold their bullish forecasts for the cryptocurrency.
At the current moment, the positive funding rate implies that it is economical to maintain open positions in the market.
Traders stick to their guts amid bearish signs
When the rate is positive, it signifies that long investors are compensating short investors to maintain their opposing positions. This scenario suggests that market participants anticipate an upward trend in prices.
Instead of “Conversely, negative funding means shorts are paying longs,” you could say “Short sellers are effectively paying a premium to hold their bearish bets on SOL, which is known as negative funding.” This paraphrase retains the original meaning but uses clearer and more natural language. The rest of your sentence remains unchanged.
When this metric increases, long investors are being more assertive. But the decrease in price indicates they aren’t gaining profits from their investment. In essence, this is a bearish sign for the token since there appears to be a lack of support from buyers in the spot market for the upward trend.
If the current trend continues in the upcoming days, it’s possible that the price of SOL may dip below $140. Furthermore, AMBCrypto analyzed the relevant liquidation levels as well.
In simpler terms, liquidation levels represent approximate prices at which sell orders could potentially outnumber buy orders, leading to forced liquidations of positions. When a significant concentration of liquidity exists within a specific price bracket, a cryptocurrency may be more likely to trend towards that area.
Is your portfolio green? Check the Solana Profit Calculator
On a positive note, there wasn’t a significant clustering of liquidity for SOL. Translated, this implies that a potential price increase for Solana may not occur in the near term.
Additionally, AMBCrypto identified significant pockets of available supply between $141 and $138. Consequently, the altcoin’s price could potentially dip to those prices in the near future.
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2024-06-29 21:11