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Solana eclipses XRP & DOGE in this metric, but it’s not all good news

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Beneath this remarkable feat, SOL has faced its fair share of challenges, as its price experienced a recent downturn.

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  • SOL liquidity increased but its price has not been stable.
  • Traders’ bullish sentiment could not stop a $3.90 million liquidation.

Solana [SOL] has become one of the altcoins with really high liquidity on Coinbase, according to market research platform Kaiko. Having high liquidity sometimes enables price stability and less volatility. 


Realistic or not, here’s SOL’s market cap in XRP terms


SOL’s health isn’t wealth

And as a measure of the demand for and supply of an asset, SOL’s high liquidity is an indication of a healthy market on its side. According to Kaiko, the hike in liquidity ensured that SOL outpaced Ripple [XRP], Dogecoin [DOGE], and Polygon [MATIC] as per the metric.

Leading altcoins in terms of liquidity may not be surprising considering how SOL outperformed most assets in the market lately. However, beneath this remarkable feat, SOL has faced its fair share of challenges, as its price has experienced a recent downturn.

Based on CoinMarketCap’s data, SOL lost 4.22% of its value in the last seven days. From the four-hour SOL/USD chart, the altcoin formed a bearish market structure. 

As of 15 August, SOL tried to hold support at $23.96. But unfortunately, there was little to no buying pressure to curtail the increasing sell-off. Thus, this led the support down to $22.90.

While SOL has risen mildly above the $22 region, volatility has become really extreme, as indicated by the Bollinger Bands (BB). The lower band of the BB also touched SOL’s price previously, indicating that the altcoin was oversold.

Although there has been a slight reversal in the trend, the Moving Average Convergence Divergence (MACD) showed that the momentum remained largely in bearish control. Negative MACD values indicate that the 12-day EMA is below the 26-day EMA.

Solana [SOL] price action

Source: TradingView

And at press time, the MACD was -0.13. Unless demand for SOL outweighs the selling pressure, the altcoin price could decrease as low as $20.

Optimism gives opposing result 

Despite SOL’s downtrend, the funding rate was positive, based on Santiment’s data. Typically, a negative funding rate means that short positions outpaced long positions. However, the positive SOL funding rate implies that the average trader’s sentiment toward SOL was bullish.

Like the funding rate, the weighted sentiment was also in the positive region. The weighted sentiment considers the unique social volume with respect to opinions around an asset. 

When the metric is positive, it implies that the average perception of an asset is optimistic. Conversely, a negative weighted sentiment suggests the opposite. And SOL supported the former.

SOL weighted sentiment and funding rate

Source: Santiment


Is your portfolio green? Check the Solana Profit Calculator


Meanwhile, information from derivatives tracking portal Coinglass showed that about $3.90 million SOL positions were wiped out in the last 24 hours.

Also, longs accounted for $2.94 million out of those liquidated. Shorts positions liquidated, on the other hand, were worth $952,670.

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Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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