Solana Bulls Beware: $200 Million in Long Contracts Could Be Liquidated as SOL Approaches Critical Overbought Zone

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Simon Chandler

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Simon Chandler

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Simon Chandler is a Brighton-based writer and journalist with over ten years of experience writing about crypto, technology, politics and culture. He has written for Cryptonews.com since late 2017,...

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Last updated: 

October 25, 2024

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The price of Solana has risen by 0.5% in the past 24 hours, reaching $173.51 as the crypto market as a whole loses 0.5% today.

SOL is now up by 13% in a week and by 22% in the past fortnight, while the altcoin also posting 450% increase in a year.

While Solana remains in good health, today’s moves come as data shows that long contracts with a value of $200 million could end up liquidating if SOL’s price falls below the $161 support.

Yet with the altcoin continuing to show strong short- and medium-term momentum, it seems unlikely that it will fall below $161 anytime soon.

Solana Bulls Beware: $200 Million in Long Contracts Could Liquidate as SOL Approaches Critical Overbought Zone

Liquidation heatmaps are useful insofar as they give an indication of how much selling pressure an asset could experience in the event that its price drops below a particular level.

And in the case of Solana, yesterday saw around $200 million in contracts with a liquidation price of $161.

According to data from CoinGlass, this figure still remains high today, underlining how vulnerable the Solana price is to sudden drops.

$170 is the most dangerous level at the moment, with over $1 billion in contracts likely to liquidate if the Solana price falls below this level.

What’s interesting is that these figures are significantly higher than they currently are for other major tokens, such as BTC and ETH.

Yet at the moment SOL’s momentum is looking good, with the coin rebounding in the past hour after falling overnight.

Its relative strength index (purple) is rising back to 50 after dipping to 40, suggesting an intake of new buyers.

It is arguable, however, that the 30-period average (orange) has been above the longer term 200-period average (blue) for long enough, meaning that a fall should be coming.

This may be so, and the liquidation data would indicate that a big fall is possible, but the longer term picture continues to look good for Solana.

Its blockchain continues to attract plenty of usage as a platform for meme tokens, while it’s also looking forward to the rollout of the Firedancer validator client next year, which will improve its stability and throughput.

Combined with Fed rate rises and increase bullishness, the Solana price could therefore reach $200 by the end of November, and $250 by the end of the year.

Diversification into New High-Potential Presale Coins

For some traders, Solana’s established status as one of the biggest coins in the market may prove a turnoff, in that such coins may not experience the kind of extreme price rises we sometimes see with small-cap tokens.

If so, then some traders may prefer to diversify into presale tokens, which can often rally big once they list, particularly if they’ve had successful raises.

One of the most interesting right now is Crypto All-Stars (STARS), an exciting new Ethereum-based token that has already raised $2.7 million in its ongoing sale..

The reason why Crypto All-Stars has been attracting attention is that it has unique fundamentals, offering a ‘MemeVault’ in which holders of all meme coins can stake their tokens.

By employing the ERC-1155 multi-token standard, Crypto All-Stars’ protocol can tokenize any coin, including tokens not running on Ethereum.

This will give it massive reach and accessibility, with holders of any meme token able to stake their coins with Crypto All-Stars and earn staking rewards.

Most bullishly, users who hold more STARS tokens will receive greater rewards, something which incentivizes long-term holding of the coin.

It will have a max supply of 42.069 billion, with 20% going to its presale and 25% going to staking rewards for people who stake STARS during the sale.

Investors can buy it now by going to the official Crypto All-Stars website, where 1 STARS currently costs $0.0015248.

This price is likely to explode once the coin lists, judging by its current popularity.

Buy STARS Now