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