Solana News Today: Solana Dips Toward $123 as $90M in Long Positions Face Liquidation Risk

Solana's price has fallen to $124.30, down 1.55% amid a broader crypto market decline. This dip has exposed nearly $89.54 million in leveraged long positions at risk of liquidation near $123.30. The market has seen a 1.65% drop overall, with Bitcoin and Ethereum also posting losses.

Despite the downward pressure, traders are watching key levels where large leveraged positions are clustered. Short positions dominate above $129.50, totaling $204.18 million, indicating a bearish short-term outlook. This imbalance suggests potential volatility if price swings trigger further liquidations.

High trading volume has surged 17% to $3.55 billion, showing heightened interest amid the decline. On-chain data reveals $8.77 million of SOL has moved out of exchanges, pointing to accumulation by long-term holders.

This trend, combined with steady ETF inflows, hints at underlying bullish sentiment.

Why the Standoff Happened

The Solana price drop has been fueled by broader market weakness and leveraged trading activity. On December 23, the broader crypto market fell 1.65%, with Bitcoin and Ethereum losing 2.45% and 2.75%, respectively. This environment has amplified volatility for altcoins like Solana, which relies heavily on speculative flows.

Leveraged traders are under pressure as long positions cluster near $123.30. Data from CoinGlass shows these positions are vulnerable to small price swings, which could trigger cascading liquidations and further downward momentum. Shorts hold the upper hand, with $204 million at risk above $129.50, reinforcing a bearish sentiment.

Market analysts warn that leveraged positions often precede volatility spikes. Short-term traders are bracing for a potential breakdown below key support levels, which could lead to rapid price declines. However, if prices rebound quickly, the leverage imbalance may reverse, stabilizing the market.

What Analysts Are Watching

Key technical levels are critical for Solana's near-term outlook. Traders are closely monitoring support at $123.50 and $117, which could determine the extent of the downturn. A breach below these levels may accelerate further declines toward $117, while a push above $128.23 could spark a bullish reversal.

On-chain metrics also offer insight. The $8.77 million outflow from exchanges to self-custody wallets suggests accumulation by long-term holders. Market analysts view this as a positive sign of investor confidence.

Institutional demand for Solana is also evident through consistent U.S. spot ETF inflows since December 4. These funds offer traditional investors exposure to crypto without direct handling, signaling growing acceptance. The ETF inflows validate Solana's utility in DeFi and NFT sectors, reinforcing long-term potential.

Risks to the Outlook

Despite accumulation and ETF interest, short-term risks remain. The $89.54 million in long positions at risk of liquidation could trigger further downward pressure. If prices fall below $123.30, forced selling may intensify, deepening the decline.

Market participants are also watching for signs of buyer interest. While sellers dominate at current levels, unexpected strength could shift sentiment. Historical data shows that rapid rebounds often follow liquidation events, clearing excess leverage and stabilizing price action.

For long-term investors, the current dip presents an opportunity. Analysts suggest that Solana's fundamentals remain robust, with growing adoption in decentralized applications and cross-chain solutions. However, those using leverage must remain cautious, given the volatility and risk of margin calls.

What This Means for Investors

Investors should balance short-term risks with long-term potential. While the immediate outlook is bearish, Solana's ecosystem continues to grow, supported by institutional interest and on-chain accumulation. Traders are advised to use stop-loss strategies and limit exposure to volatile leveraged positions.

For those with a longer time horizon, the current price dip may offer a buying opportunity. Accumulation trends and ETF inflows suggest that demand for Solana remains strong despite the near-term headwinds. However, patience and risk management are essential, as volatility remains a key factor.

As Solana navigates these levels, investors should focus on verified data and technical indicators. A successful breakout above $128.23 could signal a bullish reversal, while a sustained decline below $123.50 may extend the downturn. Market conditions will remain dynamic, requiring close monitoring of both price action and on-chain data.