Daily Crypto Signals: Bitcoin Holds $112K, Solana Tests $200 Support
The cryptocurrency market experienced mixed signals as Bitcoin maintained support above $112,000 following Monday's $1.62B liquidation event
Quick overview
- Bitcoin remains above the critical support level of $112,000 despite a significant liquidation event, indicating resilience in the market.
- The SEC's plan to introduce an 'innovation exemption' for digital assets has sparked optimism for more favorable regulatory conditions.
- Solana's price has dropped to $213 amid declining network activity and increased competition, raising concerns about its ability to maintain the $200 support level.
- Institutional interest in cryptocurrencies continues to grow, with significant funding rounds and legislative efforts aimed at expanding crypto investment options.
The cryptocurrency market experienced mixed signals as Bitcoin BTC/USD maintained support above $112,000 following Monday’s $1.62 billion liquidation event, while regulatory developments brought optimism with the SEC working on an “innovation exemption” for digital assets. Solana SOL/USD faced pressure at $213 as network activity declined and competition from new platforms intensified, raising questions about whether the altcoin can defend the $200 psychological level.
Crypto Market Developments
This week, the overall cryptocurrency market had some problems. Since Sunday, the total market value has dropped by $178 billion because people are worried about rising inflation and a bad US labor market. Even with these problems, there were some good things that happened in the areas of regulation and institutional adoption.
The SEC’s declaration that it will develop a “innovation exemption” by the end of the year is a big step toward more crypto-friendly rules. This regulatory carve-out would give corporations a break from traditional securities rules for a short time, letting them launch new products with less scrutiny while the SEC works on rules that are more suited to their needs. The statement came out at the same time as news that the first multi-asset crypto exchange-traded product had been approved in the US. This product gives investors access to Bitcoin, Ether, XRP, Solana, and Cardano.
On the other hand, institutional adoption kept going up. For example, blockchain payment company Fnality raised $136 million in Series C funding from big banks like Bank of America, Citi, and Goldman Sachs. The blockchain-based settlement solutions from the London-based company allow payments 24/7 and settle in real time. The company hopes to go into the US dollar and euro markets once it gets the go-ahead from regulators. Nine US legislators also asked SEC Chair Paul Atkins to speed up the implementation of Trump’s executive order on crypto retirement plans. This might make it possible for 90 million Americans who can’t invest in other assets in their 401(k) plans to invest in crypto.
Bitcoin’s Support at $112,000 Holds
Despite having its biggest single-day long position liquidation of the year on Monday, Bitcoin stayed above the important $112,000 support level. The $1.62 billion in liquidated positions put a lot of selling pressure on the market, but purchasing from both retail traders and whales helped keep the price stable. According to Hyblock, sellers are still in control of price action through aggregate cumulative volume delta. However, selling pressure seems to be easing as BTC settles between $111,000 and $113,000.
Glassnode’s research shows that Bitcoin is now at a “historically late phase” of its market cycle. Profit-taking metrics and capital flows are following patterns seen at the apex of prior cycles in 2015–2018 and 2018–2022. The circulating supply has been over the +1 standard deviation profit band for 273 days in a row, and long-term holders have made more money than in all but one preceding cycle.
Even if these signs are from the end of the cycle, trends from the past suggest that fresh all-time highs could happen in the next two to three months. But liquidation heatmaps suggest that there are big danger clusters at $107,000, and the lack of strong purchasing volume in both the spot and futures markets makes it more likely that the price will drop much further to the $106,000-$110,000 level before it starts to recover.
Could Solana Test $200 Support?
As worries about the US job situation and rising inflationary pressures grew, Solana’s native token came under a lot of strain and fell to a two-week low of $213. The 12% drop over 48 hours caused $112 million in leveraged long bets to be liquidated. Funding rates for SOL permanent futures were close to nil, showing that there wasn’t much interest in leveraged holdings. This neutral funding rate is very different from the 30% increase on August 14, when traders were too optimistic. This shows that traders are still being careful even though prices have been sluggish lately.
The price of SOL went down at the same time that the network’s fundamentals got worse. For example, the number of active addresses on Solana fell by 28% in the past week, and network fees fell by 15%. New platforms like Aster, which was created on BNB Chain and supported by Binance founder Changpeng Zhao, have taken traders’ attention away from Solana’s environment. However, the risk of losing money may be low because more institutions are getting interested.
For example, Australia-based Fitell Corp. recently announced a $100 million convertible note to support a “Solana treasury strategy.” Even though there have been some problems recently, Solana is still the leader in transaction volume and active addresses. It also has the second-highest total value locked among blockchains, which is a strong sign that prices could go up once the market becomes better.
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