Solana (COIN: $SOL) is showing signs of stress despite recent altcoin rallies. Bitcoin’s latest buying spree lifted many major cryptocurrencies, giving the impression that Solana might be bouncing back.
But beneath the surface, the network’s liquidity is shrinking, and around $500 million in leveraged long positions are hanging by a thread.
Market Performance: Weakness Under the Surface
Solana’s recent price rise to about $137 hides deeper problems. On-chain data shows the 30-day realized profit/loss ratio has stayed below 1 since mid-November, meaning more SOL is being sold at a loss than at a profit, a clear signal of bear-market conditions.
There is some support as investors continue buying Solana after the recent drop. This shows up in two ways: coins are steadily leaving exchanges, reducing the amount available to sell, and money is flowing into spot Solana ETFs.
These funds have seen $17.72 million in net inflows this week, nearly matching last week’s $20.30 million, according to SoSoValue.
Still, liquidity is fragmenting across trading pools, and futures activity is falling. The market may appear calm, but it remains fragile and susceptible to sudden shocks.
Solana Technical Analysis: Key Levels to Watch
Solana faces a critical level around $129; if the price falls here, roughly $500 million in long positions could be liquidated, adding significant selling pressure. Support below $144 is thin, so drops can happen quickly.
On the upside, a bounce toward $155 is possible if buyers step in, but this depends heavily on liquidity returning. Without it, the downtrend may continue, keeping the market under pressure.
Liquidity Reset: What It Means
Analysts describe the current situation as a “full liquidity reset.” Realized losses, sell-offs, and market-makers pulling back are shrinking liquidity. In previous cycles, this has often led to bottoming phases, where the market stabilizes before moving higher.
If Solana follows past patterns, a recovery could start in around four weeks, possibly in early January, provided demand picks up.
Meanwhile, Bitcoin’s muted price movements and large liquidation events show that leverage remains high across the crypto market. Over the past 24 hours, about $432 million in positions were liquidated, according to CoinGlass.
During the same period, Solana rose 3.2%, but $15.6 million in positions were still forced to close, making it the third-largest liquidated asset after Bitcoin and Ethereum, per CoinGecko.
Risks and Traders Outlook
The near-term outlook for Solana remains risky. High leverage, low liquidity, and weak support levels make it vulnerable to sudden drops. However, if the market stabilizes, it could create opportunities for long-term investors to accumulate.
Traders should focus on on-chain indicators like liquidity flows, realized profit/loss ratios, and futures open interest, rather than short-term price moves. The recent bounce is fragile and does not guarantee a full recovery.
Click Here for Updates on SOL – It’s 100% FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment. Please read our Full Disclaimer: https://dexwirenews.com/disclaimer/
