Solana (SOL) Long Traders Count Their Losses as Liquidations Total $27.36 Million in the Past Six Days

Futures traders who anticipated a rally and bought Solana (SOL) have recently faced liquidations as the coin’s value continues to decline.

Solana (SOL) price has continued to decline, leading to liquidations for traders who anticipated a rally and bought the coin.

At press time, the altcoin’s value had plunged by 19% in the last month to $135.56.

Solana Long Traders Face Liquidations

In the derivatives market of an asset, liquidations occur when a trader’s position is forcefully closed due to a lack of sufficient funds to maintain it.

Specifically, long liquidations happen when the value of an asset drops unexpectedly, leading to the closure of traders’ positions that were opened in anticipation of a price rally.

Due to SOL’s continuous price decline, long liquidations have amounted to $27.36 million in the last six days alone.

Read More: How to Buy Solana (SOL) and Everything You Need To Know

Despite this, the demand for long positions among market participants has remained strong. This is evident in SOL’s funding rate, which has remained largely positive. At the time of writing, this stood at 0.0063%.

In perpetual futures contracts, funding rates are used to ensure that the contract price remains close to the spot price.

When the funding rate of an asset is positive, it usually indicates a high demand for long positions. In such cases, more traders are buying the coin expecting to sell it at a higher price than those purchasing it in anticipation of a price decline.

Solana Price Analysis: Drop to $122.80 or Rally to $148.15?

For SOL long traders, it is crucial to note that the altcoin still faces the risk of further price decline. Readings from its Chaikin Money Flow (CMF) have shown a continuous liquidity outflow from its spot market.

This indicator measures the flow of money into and out of an asset. A negative CMF value indicates distribution, where the selling pressure in the market surpasses accumulation.

When both the price of an asset and its CMF are decreasing, it suggests that the current downtrend may continue or strengthen. This serves as a signal for traders to go short and exit long positions.

Read More: Solana (SOL) Price Prediction 2024/2025/2030

If this distribution trend continues, SOL’s price may experience a further decline, leading it to trade at $122.80.

However, if market sentiment shifts from bearish to bullish and accumulation increases significantly, the coin’s price may rally toward $148.15.