200 million dollars long order threatens the important support level of SOL!

The cryptocurrency market is currently witnessing apathy from investors towards trading activities. On-chain, investors tend to steer clear of altcoins, leading to a restriction in risk capital flows. The altcoin season index has fallen by 4 points to 67, indicating the absence of a true altcoin season.

Meanwhile, large-cap coins are trying to test important resistance zones. Solana (SOL) is consolidating around the 230 USD level after a strong growth surge last week. However, with weak circulating capital, a resistance wall may be forming.

Source: TradingViewIn this context, significant profits have been realized. On October 2, nearly 1.03 billion USD SOL was withdrawn from the market around a price of 234 USD, equivalent to about 4.4 million SOL that was traded. As a result, the price of SOL dropped 2.5% to 228 USD at the time of writing, indicating that the buy wall was not strong enough to absorb the pressure. The SOL/BTC ratio is also showing signs of weakness, marking the third consecutive week of decline back to early September.

Simply put, with weak liquidity flow and low FOMO sentiment, Solana's resistance level of 230 USD seems to be losing strength. In this context, what will happen when large liquidity clusters focus on the support level below?

The $200 support level of Solana is being tested with a long position

As of now, Solana is the coin with the highest risk of capitulation. First, the NRPL index turned red at the end of September, right when the price broke below 224 USD. This shift triggered about 1.7 billion USD in realized losses, indicating that losing investors rushed to sell off. As a consequence, SOL fell by 20% to 200 USD. With over 5% of the supply still stuck at 224 USD, the likelihood of the price dropping to 200 USD remains high, especially with 200 million USD in long positions overloaded in the range of 200 USD-220 USD.

Source: GlassnodeHowever, the 18.5% recovery from the 200 USD level is a noteworthy signal. After the capitulation occurred, the bulls have turned the 200 USD level into support, pushing SOL towards 230 USD. However, with resistance at the 230 USD level, the likelihood of a short-term fall to 220 USD remains high, especially with 200 million USD in long positions at risk.

However, if the bulls continue to increase and solidify the $200 level as a strong price point, this could eliminate weak long positions and pave the way for SOL to aim for $250. In this context, it seems like a potential signal for Solana's price increase in Q4, with the goal of surpassing $300.

Mr. Giáo