The cryptocurrency Solana (SOL) is currently experiencing downward momentum, with traders holding $85 million worth of short positions in the hopes that the price won’t cross the $113 level. At the time of writing, SOL was trading around $108.50, having surged by over 10% within 24 hours. This surge was accompanied by a 25% increase in trading volume, indicating greater participation from traders and investors compared to the previous day.
Technical analysis of SOL on April 6, 2025, revealed that the cryptocurrency had broken below its key horizontal support level of $114 for the first time since March 2024. Historically, this level has acted as a point of price reversal or rebound, but this time, the pattern failed. With SOL’s daily candle closing below $114, it is likely to continue crashing, potentially leading to a 30% drop if it remains below this level. Currently, SOL is trading below the 200-day Exponential Moving Average (EMA) on the daily chart, indicating a strong downtrend with continued downward momentum.
In addition to technical analysis, on-chain metrics also point to a bearish outlook for SOL. The on-chain analytics firm Coinglass reported that traders were strongly betting on the bearish side, with the SOL Long/Short Ratio standing at 0.95, indicating more short positions than long positions in the market. Traders had over-leveraged at $113.10, building $85 million worth of short positions, further solidifying the bearish sentiment in the market.
Despite recent gains, traders continue to hold a bearish outlook on SOL, with indicators like the Relative Strength Index (RSI) near oversold levels, reflecting ongoing bearish sentiment and dominant selling pressure. However, it is important to note that these short and long positions are likely to be liquidated once the price moves significantly in either direction, potentially causing a shift in market sentiment. Overall, the combination of technical analysis and on-chain metrics indicates that bears are currently dominating the SOL market.
