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HomeNewsSolana on the Brink: What Happens If It Reaches $176 and Triggers...

Solana on the Brink: What Happens If It Reaches $176 and Triggers Massive Liquidations?

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  • Solana trades at $161.26, with a market cap of $74.8 billion, ranking as the fifth-largest cryptocurrency.
  • Potential $3 billion in liquidations if Solana hits $176, indicating a shift towards a price correction.

Solana, a leading cryptocurrency, is currently trading at $158.26 with a market capitalization of $74.8 billion, making it the fifth largest in its category.

Over the past week, Solana has experienced a notable increase of more than 12% in its price, with a 5% rise in the last 24 hours alone. This bullish trend reflects a sustained control by buyers in the market.

Despite these gains, Solana faces potential challenges ahead. According to ETHNews, a surge to $176 could result in nearly $3 billion in liquidations of short positions. This situation often leads to a short- to midterm correction in price. 

Solana-SOL-15.50.41-17-Jul-2024
Source: Santiment

Analysis of Santiment’s data supports this, showing an increase in trading volume which traditionally signals a continued price rise. However, the market sentiment appears to be shifting, with an increase in bearish views as indicated by the drop in the Weighted Sentiment.

Source: Coinglass

Further complicating matters, analysis from Coinglass suggests a decrease in the Long/Short Ratio, pointing to a growing bearish sentiment among traders. Moreover, the ‘fear and greed index’ has reached a phase of ‘extreme greed,’ which historically precedes a market correction.

SOLUSDT_2024-07-17_15-58-16-2048x1100
Source: Tradingview

Observations from SOL’s daily chart indicate that the price recently touched the upper limit of the Bollinger Bands—an indicator often associated with overbought conditions. Additionally, a decrease in the Chaikin Money Flow hints at decreasing buying pressure, despite the Moving Average Convergence Divergence (MACD) continuing to show support for an upward trend.

solona-liquidation-rises

Crypto analyst Ali noted on X that if Solana reaches the $176 mark, it could trigger substantial market movements due to the liquidation of $2.98 billion in short positions. This scenario underscores the volatile nature of cryptocurrency markets and the high stakes involved in trading decisions.

A continued rise could see it reaching higher benchmarks, but the potential for a significant correction looms, indicating that traders and investors must remain vigilant.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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