Solana (SOL) traders appear confident that the recent drop in the altcoin’s price is just a short-term dip rather than a prolonged period of volatility. This is evident from the position of Solana long positions since the broader market liquidation, which has reached hundreds of thousands of dollars.
But do the indicators agree with this sentiment? Here is a comprehensive analysis of the potential price action of SOL.
Solana traders confident in altcoin recovery
According to Coinglass, Solana’s buy/sell ratio is 1.14. As the name suggests, the buy/sell ratio acts as a measure of traders’ expectations in the market. When the ratio is lower, it means there are more short positions than long positions in the market.
However, a reading above 1 indicates that there are more long positions than short positions. For context, traders with long positions are expecting a price increase. On the other hand, traders with short positions are expecting a price decrease.
Therefore, the current ratio indicates that Solana longs are dominating the market. Hence, the overall sentiment is bullish and if verified, could be profitable for these traders. Interestingly, this is happening at a time when the market has been experiencing the most liquidations in the past few days.
Over the past 24 hours, SOL liquidations have reached around $60 million. Of this amount, long positions accounted for more than $57 million, while short positions accounted for the rest. Liquidations occur when a trader’s margin falls, prompting the exchange to close the position to prevent further losses.
This wave of liquidations was triggered by Solana’s price falling below $215, which triggered a series of margin calls and forced closures.
SOL Price Prediction: It's Not Time for a Recovery Yet
On the daily chart, the price of Seoul has fallen below the 20 and 50 exponential moving averages, which are technical indicators that measure the direction of the trend.
When the price is above the EMA, the trend is up. On the other hand, if the price is below the EMA, the trend is down, which is the case with the Sol price.
Another notable trend seen on the chart below is that Sol price is trading below the demand zone at $210. If the altcoin fails to recover above this zone, the correction may intensify, and the token’s value may drop to $189.36.
However, if Solana sees an increase in buying pressure, the trend may reverse, and it could rise towards $264.66.
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