Solana (SOL) traders look confident and expect only a temporary dip in the altcoin rather than a long-term decline. This is reflected in the long position since the market sell-off, which has been in the hundreds of thousands of dollars.
But are the indicators in line with market sentiment? Here is an in-depth analysis regarding the potential movement of the Solana token.
Solana traders believe in a possible recovery
According to Coinglass, the Solana Long/Short ratio is 1.14. As the name suggests, the long/short ratio acts as a barometer of traders’ market expectations. When the ratio is lower, it means there are more shorts than longs in the market.
However, a value above 1 means that there are more long than short. To put this into context, longs are traders with positions that anticipate an increase in price. Conversely, shorts are traders who expect a decline.
Therefore, the current ratio suggests that Solana longs dominate the market. So the current sentiment is more optimistic. If this sentiment turns out to be true, it could be beneficial for these traders. Interestingly, this is happening at a time when the market has seen the highest number of liquidations since 2021.
Over the past 24 hours, SOL liquidations have reached approximately $60 million. Of that amount, long positions accounted for over $57 million, while short positions accounted for the remainder. Liquidations occur when the trader’s margin is insufficient, prompting the platform to close the position to prevent further losses.
This wave of liquidations was triggered by the price of Solana falling below $215, which caused a cascade of liquidations.
Price Forecast: Isn’t It Time for a Recovery?
On the daily chart The price of SOL has fallen below the 20-day and 50-day exponential moving averages (EMA). However, the latter are technical measuring indicators trend direction.
When the price is above the EMA, the trend is bullish. On the other hand, if the price is below, the trend is bearish, which is currently the case with the SOL price.
Another notable trend in the graph below is that SOL price is trading below the reload zone at $210. If the altcoin fails to recover above this zone, the correction could intensify. accordingly the value of the token could drop to $189.36.
However, if Solana sees increased buying pressure, the trend could reverse. Thus, the asset could restart towards $264.66.
Moral of the story: beware of false starts on Solano’s side.