Solana’s recent decline, combined with significant liquidation levels, could be a sign of potential difficulties for the network.
The cryptocurrency has lost a remarkable 5% of its value in the last 24 hours and is showing signs of increasing selling pressure in the markets.
Data analytics platform Alphractal warned that "levels below $210 and $200 are the areas where the most liquidation is taking place on the stock market."
Solana faces potential liquidation risks with bear market signals, with short-term price targets signaling liquidations at critical levels around $210.
Solana has gained 34% in the past month to reach a market cap of $106 billion, according to CoinMarketCap data. However, this positive momentum faces challenges as it encounters critical liquidity levels.
Alphractal made a statement that liquidations will increase if the price drops to between $247 and $252, especially since many long positions from the previous bull run are still illiquid.
This data signals a risky situation for investors holding long positions, as a liquidation spike around $210 could trigger a significant price correction.
Currently, Solana’s price is sitting at $224.94 and the recent 5% decline can be explained as a result of increased profit taking and increasing selling pressure following the bull cycle.
Data shows that flows to centralized exchanges (CEX) increased ahead of the price drop, suggesting that investors are making strategic moves to capitalize on the rally. Furthermore, Alphractal notes that a drop to $210 could be a strategic re-entry opportunity for investors, as liquidation levels center around this threshold.
Coinglass data shows an increase in short positions, creating a pessimistic atmosphere in the markets. This could be a sign that the current downtrend is set to continue.
When examining the daily chart of SOL, it is seen that the possibility of a drop to $210 has increased after the $237 support level was broken. The Relative Strength Index (RSI) is showing falling momentum, which strengthens the expectation of a pullback to the $210 support level.
According to TradingView data, current market conditions suggest that investors should be cautious about Solana’s price action, especially with a critical concentration at the liquidation point at $210.