Long-term Solana holders are increasing distribution of their assets as the cryptocurrency faces mounting pressure from record futures liquidations. Data shows veteran investors who typically hold SOL for more than three months are reducing their positions, while 97% of futures liquidations yesterday came from long positions, creating a challenging environment for price recovery.
What to Know:
- Solana's Liveliness metric reached a 30-day high on September 21, indicating increased movement of previously dormant tokens held by long-term investors
- Long liquidations dominated Solana's futures market yesterday, accounting for 97% of all positions wiped out and reaching a year-to-date high
- The cryptocurrency faces potential decline toward $195.55 if selling pressure continues, though renewed demand could drive prices to $248.50
Veteran Investors Signal Weakening Confidence
Blockchain analytics firm Glassnode reports Solana's Liveliness metric climbed steadily over recent weeks. This measurement tracks the ratio of coin days destroyed to total coin days accumulated, providing insight into whether long-term holders are retaining or disposing of their assets.
The metric's rise to a 30-day peak suggests previously dormant tokens are moving. When Liveliness increases, it typically indicates long-held coins are being transferred or sold, reflecting profit-taking behavior among established investors.
Solana's Hodler Net Position Change has remained negative since August 27, according to Glassnode data.
This metric measures whether long-term holders are expanding or reducing their exposure over specific periods. Positive readings indicate coins moving into hodler wallets, while negative values signal distribution rather than accumulation.
The persistent negative trend shows investors who traditionally provide market stability are reducing their holdings. This pattern adds to broader selling pressure affecting the cryptocurrency's performance.
Futures Market Faces Historic Liquidation Wave
Yesterday's trading session saw long liquidations in Solana futures reach unprecedented levels for 2024. The surge accounted for 97% of all positions eliminated in the coin's derivatives market, highlighting the extent of bearish sentiment among leveraged traders.
These liquidations typically damage confidence among participants who had positioned for upward price movement. The scale of long position closures suggests many traders were caught off-guard by Solana's price decline.
Market analysts note such liquidation events can create cascading effects.
As positions get forced closed, additional selling pressure emerges, potentially driving prices lower and triggering more liquidations in a self-reinforcing cycle. The futures market distress reflects broader challenges facing Solana amid cryptocurrency market uncertainty. Traders who had maintained bullish positions found themselves facing significant losses as the token's value dropped below key support levels.
Liveliness measures token movement patterns by comparing destroyed coin days to accumulated coin days. Coin days represent the time tokens remain stationary in wallet addresses, with longer periods indicating stronger holding conviction. Long liquidations occur when traders using borrowed funds to bet on price increases face margin calls.
When prices fall instead of rising, exchanges automatically close these positions to prevent further losses, creating additional selling pressure.
Hodler Net Position Change tracks whether long-term investors are increasing or decreasing their cryptocurrency holdings. The metric helps identify distribution patterns among committed holders who typically provide market stability during volatile periods.
Price Outlook Hinges on Demand Recovery
Technical analysis suggests Solana could test the $200 level again if current selling pressure persists. The cryptocurrency faces potential decline toward $195.55 as long-term holder distribution combines with futures market liquidations.
However, renewed buying interest could alter this trajectory. If demand emerges to absorb the increased supply from long-term holder sales, SOL's price might reverse course and advance toward $248.50. The cryptocurrency's near-term direction depends largely on whether new buyers step in to replace exiting long-term holders. Market participants will watch for signs of demand recovery that could stabilize prices above current levels.
Final Thoughts
Solana confronts significant headwinds as long-term holders reduce positions while futures liquidations reach annual highs. The combination of veteran investor distribution and leveraged position closures creates challenging conditions for price recovery in the near term.