Solana Could Slip Below $200 as Long-Term Holders Dump and Shorts Climb
Solana’s worth has been trending downward over the previous 5 days, as weakening shopping for stress leaves the favored altcoin weak to additional declines.
On-chain knowledge reveals that its long-term holders (LTHs) are more and more liquidating their positions. At the identical time, futures market knowledge present an increase in demand for shorts, signaling fading bullish momentum.
Long-Term Holders Dump SOL, Shorts Rise
According to Glassnode, SOL’s Liveliness has trended upward since early August and is at a three-month high of 0.76 at press time, a bearish signal for worth motion.
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Liveliness tracks the motion of beforehand dormant tokens. It does this by measuring the ratio of an asset’s coin days destroyed to the whole coin days collected. When it falls, LTHs are transferring their belongings off exchanges, usually a bullish signal of accumulation.
On the opposite hand, when an asset’s liveliness climbs, extra dormant cash are being offered, signaling elevated profit-taking by LTHs
With SOL’s Liveliness at a three-month peak, its LTHs are actively offloading their holdings, confirming the broader bearish outlook.
Furthermore, the development isn’t any completely different within the SOL derivatives markets. Per Coinglass, the coin’s lengthy/quick ratio is 0.97 as of this writing, highlighting rising market conviction that the asset could proceed to slip.
The lengthy/quick ratio compares the variety of lengthy and quick positions in a market. When an asset’s lengthy/quick ratio is above 1, there are extra lengthy than quick positions, indicating that merchants are predominantly betting on a worth enhance.
Conversely, as seen with SOL, a ratio beneath one signifies that almost all merchants are positioning for a worth drop. This confirms the heightened bearish sentiment and rising expectations of continued worth decline within the quick time period.
Can Solana Avoid a Dip to $195?
If bearish stress continues to mount, SOL might see a decisive break beneath the $200 psychological mark, probably opening the door to steeper losses within the quick time period. In this state of affairs, the coin’s worth might plummet to $195.08.
On the opposite hand, if shopping for resumes, SOL could rally toward $218.66.
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