Massive Selling Pressure: Longs Capitulate
The crypto market is going through a turbulent patch, and Solana is not being spared. Currently trading around $85 after a weekly drop of nearly 10%, the asset has printed consecutive lower lows over six days. This bearish momentum brutally dragged the price down to $83, wiping out all the bullish efforts accumulated since the beginning of May.
Furthermore, the sharp fall of Solana has triggered an absolute bloodbath in the derivatives market. Over $27.3 million in long positions were liquidated, forcing many overly optimistic traders out of the market. This cascading liquidation phenomenon has significantly accelerated the retracement of SOL.
Data shows a Long/Short ratio sustained below the 1 mark for an extended period. This technical signal confirms that the overall sentiment is extremely bearish. Investors are anticipating further downside, preferring to close their positions rather than risk new losses in the face of this relentless momentum.
Is the Key $80 Support in Danger?
In terms of technical analysis, the situation for Solana is becoming critical. The $83 level is acting as a temporary buffer zone, but all eyes are now turned toward the psychological and technical support at $81. If the selling pressure persists, a breakdown of this level could pave the way toward the bottom of the channel located around $78.
Conversely, to hope for a bullish scenario and reignite a rally, buyers will imperatively need to regain control of the POC at $85.3 and secure a daily close above this level. Subsequently, the 9 hour order block between $90 and $93 is the crucial level to overcome to prove that the bulls are back in charge.
How Low Can the Price of Solana (SOL) Fall?
The current setup leaves traders in a state of uncertainty. If spot market demand manages to absorb the supply, a technical bounce remains possible to salvage the long term bullish structure. However, the lack of clear buying signals maintains the risk of a deeper plunge.
Moreover, the short term liquidation heatmap shows that longs are currently accumulating between $82 and $80. Additionally, Tuesdays are often synonymous with market dips. This adds yet another bearish confluence for SOL.
In short, SOL could bounce off the $80 to $82 zone. But if this area gives way, a drop to $78 will be almost imminent.
The coming days will be decisive in determining whether this leverage flush is a simple market reset before the next bull run, or the beginning of a more pronounced bearish trend. Is it the right time to accumulate SOL, or should we expect to smash through to new lows? For now, the short term is bearish. But stock markets look poised to rebound in the coming weeks, and SOL should follow suit and potentially target that $93 mark.
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