- Solana price has dipped below the $230 mark on Friday, as bullish tailwinds from LTC ETF advances tapered off.
- In the derivatives market SOL traders have mounted $217 million short positions around the $265 price levels.
- Prevailing bearish leverage during a price recovery phase indicates a possible short-squeeze if the optimistic market sentiment continues.
Solana price crossed $230 on Friday, with large number of Short traders caught unawares by the earlier-than-expected ETF approval rumors, is SOL price
Solana price tops $230 on LTC ETF chatter
Solana (SOL) surged past the $230 mark on Friday, driven by renewed investor interest following speculative chatter around an early approval for a Litecoin ETF.
The digital asset, which had been stabilizing around the $220 area earlier in the week, saw a significant increase in momentum as the wider cryptocurrency markets reacted positively to ETF-related discussions.
Solana’s price movements mirrored those of other leading tokens, with Bitcoin (BTC) hovering near $103,000 and Ethereum (ETH) advancing past $2,400.
Litecoin (LTC), the primary catalyst for the latest market enthusiasm, saw a near 15% gain breaking above $130 spike as Bloomberg analysts hinted at positive ETF-related developments.
Solana Price Action | SOLUSDT
Despite a temporary pullback following its peak at $235, SOL’s trading volume remains elevated, indicating strong investor engagement.
With market sentiment remaining positive, Solana may be positioned for another move up towards the $250-$265 range in the upcoming days.
However, resistance at the $240 mark remains a key level to watch for traders looking for confirmation of a sustained breakout.
Bears Caught Unaware with $220M Leverage
As Solana’s price recovery unfolds, a large number of short traders find themselves in a challenging situation.
In the derivatives market, over $217 million in short positions have been established around the $265 level, making them susceptible to a potential short squeeze.
The rapid uptick in SOL’s price, driven in part by speculative ETF optimism, appears to have caught bearish traders off guard, amplifying the likelihood of a liquidation cascade if bullish momentum holds.
Solana (SOL) Liquidation Map | Jan 31, 2025
As seen above, amid the 7% gains on the day, SHORT traders were holding over $217 million active short leverage contracts at press time on Friday, outpacing long positions, listed for $193 million.
Historically, short positions exceeded longs during the recovery phase as observed in the SOL derivatives markets this week.
This rare market dynamics often leads to a short squeeze—a scenario where short sellers are forced to buy back their positions as prices move against them, further accelerating the upward movement.
If Solana continues on its current path and heads towards the $250-$265 resistance zone, forced liquidations could spark an aggressive rally, increasing pressure on short sellers and bolstering the bullish sentiment.
Solana Price Outlook: Focus on $250 resistance
Solana’s price activity depicted on the daily chart indicates a contest for dominance between bulls and bears as it hovers around $232.72.
The asset is trading marginally above VWAP at $232.26, suggesting a neutral-to-bullish short-term outlook.
The mid-line of the Keltner Channel at $231.44 is offering immediate support, while the lower band at $194.49 represents a more distant safety net.
The volume at 104.56K indicates moderate participation, though the previous sessions saw notable sell-side pressure.
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