- If Solana surpasses $200, $1.2 billion in short positions could be liquidated, triggering a rapid price surge.
- Traders on Binance, OKX, and Bybit have significant short exposure, increasing the likelihood of cascading liquidations.
- Factors such as FTX creditor re-entry, institutional adoption, and DeFi growth could push SOL above the key resistance level.
Solana (SOL) could be on the verge of a significant market event as liquidation levels signal a potential short squeeze. Market data indicates that if SOL’s price surpasses $200, an estimated $1.2 billion worth of short positions will be liquidated. This scenario could lead to a sharp price increase, driven by forced buybacks from traders caught in short positions.
As of today,Solana is trading at $168.49 with a price surge of 0.6% showing a positive momentum in the market.The support is at $161.66 while its resistance level is holding at $170.86.
Large Short Liquidation Levels Identified
According to liquidation maps, Solana’s current price hovers around $168.6, with a high concentration of short positions placed up to the $200 mark. A price movement beyond this level could result in cascading liquidations, forcing traders with short positions to cover their losses by purchasing SOL at market prices. This action could push the price even higher, amplifying volatility.
Most of these open positions are present on major cryptocurrency exchanges Binance and OKX as well as Bybit. Treasury financing enabled investors to establish contracts which make up a large portion of trading volume against future increases in price while simultaneously increasing potential upward price volatility when liquidations occur.
Key Factors That Could Trigger a Short Squeeze
Several factors could contribute to Solana’s price moving beyond $200 and triggering the short squeeze. One major element is the potential re-entry of FTX creditors into the market. If former FTX stakeholders regain confidence in Solana, it could lead to renewed buying pressure, further accelerating price movements.
Additionally, broader market sentiment and bullish news related to Solana’s ecosystem could act as catalysts. Positive developments, such as institutional adoption, increased decentralized finance (DeFi) activity, or ecosystem upgrades, could drive significant demand for SOL.
Market Implications and Investor Caution
A brief squeeze creates swift market oscillations that creates benefits for some traders although it poses hazards for the others. Long-position holders usually generate significant profits during short squeezes but high-leverage short account holders often experience asset liquidations and money losses.
Risk management becomes essential for leveraged trading because these price movements result in high market volatility. An upward price trajectory would kickstart when SOL exceeds $200, resulting in several successive liquidations.
