In a surprising turn of events, Solana (SOL), a leading cryptocurrency known for its innovative technology, has been facing increased selling pressure, causing a significant shift in market sentiment. Despite a recent bullish run fueled by Ripple's partial victory against the SEC, SOL's price has been under pressure, leaving investors on the edge of bearish momentum.
SOL's $30 Million Liquidation Sends Shockwaves Through Market
Over the past four days, SOL's total liquidation has surged past the $30 million mark, a development that has sent shockwaves through the investor community. This surge in liquidation has had a profound impact on SOL's price, causing it to stumble near higher levels.
Data from Coinglass reveals that when SOL's price rose above $26, short traders – those betting on the price of an asset falling – began to liquidate their positions. This move is not uncommon as traders seek to avoid further losses when the price rises. However, the unexpected heavy liquidation by long traders, who typically hold onto their positions in anticipation of further price increases, suggests a lack of confidence in further price growth and a desire to lock in profits.
Ripple's Legal Uncertainty Fuels Bearish Sentiment
Adding to the bearish sentiment is the uncertainty surrounding Ripple's legal status. Despite its recent partial victory, the SEC could appeal at any time, creating a cloud of uncertainty over cryptocurrencies like SOL. This uncertainty has triggered bearish feelings among bullish holders, intensifying the selling pressure and contributing to SOL's recent price decline.
As of the time of writing, SOL is trading at $27.1, marking a nearly 5% decline from yesterday's rate. The bullish momentum was short-lived as the price quickly declined from its high, with the Relative Strength Index (RSI) indicating a move towards the midline from its overbought region.
Looking ahead, if SOL's price drops below the immediate support of $25 and the 23.6% Fibonacci channel, it could trigger a steep fall and initiate a consolidation near the $20 mark. A further decline could see the price hovering near $15.
However, all is not lost for SOL. The key level to watch on the upside is the breakout point at $30. If bulls manage to convert this level into a support, SOL could potentially initiate a powerful rally towards $38-$39.
In these uncertain times, investors are advised to exercise caution and consider their risk tolerance before making investment decisions. As always, it's crucial to stay informed and keep an eye on market developments.