Price Analysis

Will Solana Price Hold 18% Gains As $25M Liquidations Raise Concerns

Solana price staged a strong recovery to $140, but persistent liquidations in the futures markets may hinder further gains towards $150 and $160.
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Will Solana Price Hold 18% Gains As $25M Liquidations Raise Concerns

Highlights

  • Solana defies odds with 18% rapid price increase to test $140 resistance.
  • The RSI affirms the short-term bullish comeback, reinforced by the Money Flow Index.
  • Liquidations in the derivatives market remain elevated, casting doubt on SOL’s new uptrend.
  • Open interest is up 22%, with volume down 18%, which points to market indecision.

Solana price surged 18% testing resistance at $140 amid a broader market turn around in the wake of Monday chaos. Sentiment had improved slightly, but it might not be enough to sustain the price increase, especially with liquidations in the futures market still raising concerns.

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Solana Price Recovery Threatened

The Solana price crash started on July 29 when the smart contracts token stalled at $193 on various exchanges. In addition to the Federal Reserve’s decision which left interest rates unchanged, lower than expected jobs data and reports of a recession in the US fuelled the sell-off.

War tensions in West Asia are keeping markets including crypto on the edge amid fears of lack of conviction for the uptrend. Hence, the need for a holistic SOL price prediction – exploring whether the uptrend will advance toward $200 or correct to $100.

Solana price exchanged at $137 on Binance during US business hours on Tuesday. After recouping losses from an extended candle wick at $110, the bulls took out a minor hurdle at $130 but stalled at $140.

A recovery in the Relative Strength Index (RSI) from the oversold region encouraged traders to long SOL. If the RSI maintains the trajectory above the midline in the neutral region, Solana will gain traction above $140 favouring a potential rally past $150 and $160 seller congestion zones.

Bulls will look for the most important breakout above the dotted descending trend line. Solana must overcome this barrier to affirm the bullish grip and increase the chances of sustaining the rally.

Solana price chart | Tradingview

However, the 200-day Exponential Moving Average (EMA) limits SOL’s immediate upside, which complicates the situation for the bulls. As the price stalls, a correction is anticipated below $140, increasing the likelihood of sweeping $130 and $120 levels for liquidity.

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$25 Million SOL Futures Liquidated

Liquidations spiked adding pressure on the sell-side and dampening the market further. According to Coinglass data, more than $1.1 billion worth of longs and shorts had been wiped out on Monday alone.

Furthermore, as SOL price increased on Tuesday, more investors were liquidated, totalling over $25 million of long and short positions.

Solana futures liquidations | Coinglass

Note that rising futures liquidations put downward pressure on Solana price. And, forced selling from liquidated positions tend to amplify market sell-offs, often resulting in price declines and high volatility.

Another unique situation is the sudden spike in the open interest by 22% in 24 hours while volume remains low. This may imply indecision among investors and a lack of conviction in the market.

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Frequently Asked Questions

How do liquidations impact price?

Increasing futures liquidations exert downward pressure on prices.

How does increasing open interest with decreasing volume affect SOL price?

Increasing open interest with decreasing volume often indicates a lack of conviction in the market.

Will the Solana rally continue to $160?

Solana’s uptrend must first pass the litmus test at $140 and overcome this resistance to affirm the uptrend toward $160. A decline to $130 is still possible.
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John Isige

John is a seasoned crypto expert, renowned for his in-depth analysis and accurate price predictions in the digital asset market. As the Price Prediction Editor for Market Content at CoinGape Media, he is dedicated to delivering valuable insights on price trends and market forecasts. With his extensive experience in the crypto sphere, John has honed his skills in understanding on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the dynamic metaverse landscape. Through his steadfast reporting, John keeps his audience informed and equipped to navigate the ever-changing crypto market.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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