Solana’s price has been trending downward over the past five days, as weakening buying pressure leaves the popular altcoin vulnerable to further declines.
On-chain data reveals that its long-term holders (LTHs) are increasingly liquidating their positions. At the same time, futures market data show a rise in demand for shorts, signaling fading bullish momentum.
Long-Term Holders Dump SOL, Shorts Rise
According to Glassnode, SOL’s Liveliness has trended upward since early August and is at a three-month high of 0.76 at press time, a bearish signal for price action.
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Liveliness tracks the movement of previously dormant tokens. It does this by measuring the ratio of an asset’s coin days destroyed to the total coin days accumulated. When it falls, LTHs are moving their assets off exchanges, often a bullish sign of accumulation.
On the other hand, when an asset’s liveliness climbs, more dormant coins are being sold, signaling increased profit-taking by LTHs
With SOL’s Liveliness at a three-month peak, its LTHs are actively offloading their holdings, confirming the broader bearish outlook.
Furthermore, the trend is no different in the SOL derivatives markets. Per Coinglass, the coin’s long/short ratio is 0.97 as of this writing, highlighting growing market conviction that the asset may continue to slide.
The long/short ratio compares the number of long and short positions in a market. When an asset’s long/short ratio is above 1, there are more long than short positions, indicating that traders are predominantly betting on a price increase.
Conversely, as seen with SOL, a ratio below one indicates that most traders are positioning for a price drop. This confirms the heightened bearish sentiment and growing expectations of continued price decline in the short term.
Can Solana Avoid a Dip to $195?
If bearish pressure continues to mount, SOL could see a decisive break below the $200 psychological mark, potentially opening the door to steeper losses in the short term. In this scenario, the coin’s price could plummet to $195.08.
On the other hand, if buying resumes, SOL could rally toward $218.66.
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