Solana prices have been heading downward over the past five days, and as purchasing pressures weaken the popular Altcoin becomes vulnerable to further declines.
Chain Data reveals that its long-term holders (LTHS) are increasingly liquidating their position. At the same time, futures market data shows an increase in demand for shorts, waning the fierce momentum.
Long term holders dump the sol and the shorts rise
According to GlassNode, Sol’s vibrancy has been rising since early August, at 0.76 a three-month height at press, making it a bearish signal for price action.
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Vibration tracks the movement of previously dormant tokens. This is done by measuring the ratio of the coin days of an asset to the total accumulated coin days. Once that falls, LTHS is moving assets out of exchange. It is often a bullish sign of accumulation.
Meanwhile, as the vibrancy of the assets climbs, more dormant coins are on sale, indicating an increase in profits due to LTHS
With Sol’s vibrantness at its three-month peak, its LTH is actively offloading its holdings and confirming a broader bearish outlook.
Furthermore, this trend does not differ in the Sol Derivatives market. For each Coinglass, the long/short ratio of coins is 0.97 at the time of this writing, highlighting the market’s confidence that assets may continue to slide.
The long/short ratio compares the number of long and short positions in the market. If the long/short ratio of assets exceeds 1, it can be longer than the short position, indicating that the trader is primarily betting on price increases.
Conversely, as seen in SOL, ratios below one indicate that most traders are positioned for price drops. This confirms the growing expectations of enduring bearish sentiment and continued price declines in the short term.
Can Solana avoid dips up to $195?
If bearish pressure continues, Sol can see a critical break below the $200 psychological mark, which could open the door for sudden losses in the short term. In this scenario, the coin’s price could plummet to $195.08.
Meanwhile, if you buy a resume, Sol may gather towards $218.66.
Disclaimer
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