Solayer (LAYER) Under Intense Pressure After a Sudden 45% Crash Wiped Out Weeks of Bullish Momentum

Solayer (LAYER) is under intense pressure after a sudden 45% crash wiped out weeks of bullish momentum. Once up 460% since February, the token trades below $1.70 as

Solayer (LAYER) is currently under immense pressure following a staggering 45% crash that has wiped out several weeks of bullish momentum.

The altcoin is now trading below $1.70 with nearly $350 million in market cap lost in this crash.

As the price plummet to new lows, it’s becoming clear that the market is highly divided.

Those expecting a rebound from this oversold bounce highlight the bullish long/short ratio of 1.45, suggesting more traders are positioning for an uptick.

However, those bracing for further downside cite the upcoming 26.5 million LAYER token unlock on May 11, which will bring a major influx of sell-side pressure.

Solayer Loses Nearly $350 Million Market Cap – What’s Behind the Drop?

LAYER has shed approximately 35% in just 24 hours, sliding from nearly $3.10 to $1.90.

This sharp drop has taken the community by surprise, especially considering Solayer’s unique proposition. It’s the first hardware-accelerated blockchain designed to offload operations onto programmable chips, aiming for over 1 million TPS and 100 Gbps bandwidth.

The project also offers real-world utility through its Solayer Emerald Card, which enables users to spend USDC seamlessly via Visa, with integration for Apple Pay and Google Pay.

Moreover, Solayer is actively developing its own Layer 2 scaling solution to further enhance its capabilities.

From February 18 to May 5, LAYER experienced a surge of 460%, making it one of the best-performing altcoins of the year. But the recent crash has quickly disrupted this bullish momentum.

Rumors and speculation have been swirling about the cause of the sudden downturn. Some are blaming market makers for triggering a cascade of liquidations with large buy and sell orders.

Others are accusing the founders of engaging in shady practices to personally benefit from the token's rise. A few are pointing towards the daily 110,600 LAYER token unlocks, which contribute to a slow and steady release of tokens.

However, these daily unlocks amount to just $219,000 in value—hardly significant enough to justify a $250 million+ loss in market cap.

A more substantial concern is the upcoming major token unlock on May 11, when 26.5 million LAYER (worth about $51 million at the time of writing) will be released.

If market sentiment doesn’t improve before then, this influx of tokens could amplify selling pressure and potentially push the price even lower.

LAYER Crash Deepens: $3.2 Million in Long Liquidations Fuel Panic

In the past 24 hours, LAYER’s long/short ratio stands at 0.78, with 56.14% of traders positioned short—highlighting a strong bearish bias.

Additionally, around $3.2 million in long liquidations were triggered, more than double the $1.5 million in short liquidations.

This rapid liquidation of long positions, as they get sold at a loss to close leveraged trades, likely accelerated the drop from $3.10 to $1.90.

Furthermore, with the upcoming May 11 token unlock, the unwind of leveraged positions becomes a key driver of this crash.

While the long/short ratio has since flipped to 1.45—indicating that more traders are now positioning for a rebound—the lack of order book depth remains a concern.

In such environments, price volatility can remain high even if sentiment shifts back to bullish. A large influx of liquidity is needed to sustain any significant price move.

Longs Pile In as LAYER Struggles Below $1.90

Solayer (LAYER) is facing an uncertain outlook as its price struggles to hold above $1.90 following a steep decline that has traders and investors scrambling for answers.

The true cause of the crash is still being debated, and sentiment remains fragile ahead of a major token unlock on May 11.

Those expecting a rebound from this oversold bounce highlight the bullish long/short ratio, which now stands at 1.45, suggesting that 59.2% of traders are positioning for an uptick.

This rapid shift from a strong bearish bias to a more neutral stance may suggest that some traders believe the worst is over, especially after an aggressive selloff.

However, those bracing for further downside cite the upcoming 26.5 million LAYER token unlock on May 11. This will bring a major influx of tokens into the market, potentially increasing selling pressure and putting additional weight on the price.