Solana (SOL) Faces Selling Pressure Amidst Long-Term Holder Distribution
Solana (SOL) is experiencing significant selling pressure as long-term holders (LTHs) increase their distribution, signaling a decline in confidence regarding the altcoin's short-term prospects. The surge in long liquidations within the SOL futures market further contributes to the negative sentiment, discouraging potential buyers who typically hold SOL for extended periods.
Increased Distribution by Solana's Long-Term Holders
Data from Glassnode indicates a consistent rise in SOL's Liveliness in recent weeks. This metric reached a 30-day high on September 21, revealing increased movement of previously dormant tokens. This suggests that long-held tokens are being moved or sold, indicating profit-taking and diminished conviction among long-term investors.
The Liveliness metric tracks the ratio of coin days destroyed to the total coin days accumulated, providing insight into whether LTHs are holding or spending their coins.
Furthermore, negative readings from SOL's Hodler Net Position Change reinforce this bearish outlook. According to Glassnode, this metric has consistently trended downward, displaying negative values since August 27. This suggests that long-term investors are reducing their exposure to SOL.
The Hodler Net Position Change tracks the net position of long-term holders over a specific period, measuring whether investors are increasing or decreasing their exposure. A negative reading indicates that long-term holders are distributing their assets instead of accumulating them.
Record Futures Liquidations Add to Solana's Woes
The declining confidence among Solana's long-term holders can be attributed to the overall bearish market conditions, which have negatively impacted SOL's value, resulting in significant losses for bullish traders. Recent long liquidations on Solana futures reached a year-to-date high, representing 97% of all positions liquidated in the coin's derivatives market.
Such liquidations tend to erode confidence among participants who had bet on the coin's upside potential, potentially exacerbating the sell-off.
Potential Price Scenarios for SOL
Based on the current trends, Solana's price could potentially fall below $200, possibly reaching $195.55. However, new demand entering the market could counteract this decline. Increased buy-side pressure could reverse the downward trend and potentially drive SOL's price up to $248.50.
