Solana Faces Sharp 9% Correction as $30M Long Liquidations Test Critical $180 Support Level
Solana (SOL) dropped 9.5% on Wednesday, from $205 to $186, as the cryptocurrency markets got increasingly unstable. The digital asset is now
Quick overview
- Solana's price dropped 9.5% on Wednesday, falling from $205 to $186, with a current value of $184.
- The decline was driven by $30 million in long position liquidations in the SOL futures markets amid high open interest.
- The $180 support level is critical for SOL's recovery, with potential for a rally if it holds, while a break could lead to further losses.
- Despite the recent drop, Solana's network fundamentals remain strong, with increased block capacity and ongoing institutional interest.
Solana SOL/USD dropped 9.5% on Wednesday, from $205 to $186, as the cryptocurrency markets got increasingly unstable. The digital asset is now worth $184. It has dropped more than 8% in the last 24 hours, which is the greatest decrease in a day since March 3, when SOL plunged by more than 20%.
Massive Long Liquidations Trigger Correction
The big drop was largely due to $30 million in long position liquidations in the SOL futures markets. This happened when the token’s open interest hit an all-time high of $12 billion. Even though SOL was still 36% behind its all-time high, the high levels of open interest showed that traders were starting to unwind long positions and lock in profits after the token’s amazing 56% rise over the last 30 days.
There were a lot of signals on the blockchain that a correction would happen. The net taker volume shifted a lot toward the sell side, which suggests that there was more pressure to sell. Also, the total spot cumulative volume delta (CVD) went down, which implies that people who held the asset were probably selling it near the $200 barrier level to earn money.
SOL/USD Technical Analysis Reveals Bearish Divergence
The combined futures CVD revealed a very alarming trend: it kept coming down even as prices went higher. This negative divergence revealed that futures sellers were slowly increasing their bets, which made prices go down before they did.
Funding rates also reached their highest level in the recent three months, which signals that there are too many long transactions happening. High funding rates and record open interest made for the right conditions for a long squeeze. This drove traders who were too heavily leveraged to terminate their positions under a lot of pressure.
Critical $180 Support Level Holds Key to Recovery
Technical analysis demonstrates that SOL’s general bullish structure is still in place, even though it plunged drastically. The $180 level is now a significant support level and a key mark where the token’s short-term direction will change.
Earlier last week, SOL broke through a bullish pattern by getting back to the $180 mark. Since November 2024, this was the first substantial change in the daily bullish trend. This breakthrough also made the 50-day and 200-day exponential moving averages (EMAs) cross each other, which is a classic sign of a bullish trend.
SOL’s last golden cross, which happened between October 2023 and March 2024, caused the price to soar up by a staggering 730%. Even though the price is quite unstable right now, this gives long-term holders hope.
Solana Price Prediction: $180 Entry Could Signal Rally to New Highs
If SOL can stay above the $180 support level and prove that prices are heading up, it would build to the positive momentum and maybe open the way for greater rises into new highs. Many experts think that any decline to this level is a “golden” chance to buy more.
If support at $180 isn’t held, though, it might cause a greater loss toward the $168–$157 level. This range works with both the daily fair value gap and the 0.5–0.618 Fibonacci retracement levels, which are often viewed as high-probability places to retest technical levels.
Network Fundamentals Support Long-Term Outlook
In addition to technological issues, Solana’s basic modifications are making it stronger in the blockchain ecosystem. The network has increased its block capacity by 20%, bringing it up to 60 million compute units. Before the end of the year, it is planned to go up to 100 million CUs. This change should lower expenses, provide developers more opportunity to be creative, and make the experience better for users.
There is still a lot of interest in Solana from institutions, and a number of companies are actively acquiring SOL tokens. The DeFi Development Corp treasury is approaching close to one million tokens. Bit Mining, a business that mines Bitcoin, says it wants to fund up to $300 million solely to build a treasury for Solana tokens.
Market Outlook: Healthy Correction or Warning Sign?
Some experts think that the 9% decline is a good thing because it comes after a strong upward trend, even though it can make people worry in the near term. People are taking profits around psychological barrier levels and closing out leveraged positions. This means that the market is naturally cooling off, not that people’s feelings have changed.
The medium-term outlook for SOL is still good because Bitcoin is stable around $120,000 and other macro factors, like the chance of a Federal Reserve rate cut, are helping risk assets. Traders should keep a close eye on the $180 support level, though, because whether it holds or breaks will likely decide if this correction is just a short break in the uptrend or the start of a bigger drop.
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