Solana Reaches Breaking Point: Liquidations Skyrocket as Veteran Holders Cash Out

Solana's infrastructure groans under pressure as forced liquidations hit unprecedented levels.

Network Strain Exposed

The blockchain's much-touted scalability meets its ultimate stress test. Transaction queues balloon while validators scramble to keep pace with exit pressure. Long-term holders—the bedrock of any sustainable ecosystem—are now executing strategic retreats.

Liquidation Cascade Triggers

Margin calls ripple through DeFi protocols built on Solana's fragile framework. Automated systems trigger sell-offs faster than retail investors can react. The very mechanisms designed to protect leveraged positions now accelerate the downward spiral.

Veteran Exodus Underway

Early adopters who weathered previous volatility are now taking profits off the table. Their departure signals deeper structural concerns beyond typical market fluctuations. When the smart money leaves, it's never just about price corrections.

The so-called 'Ethereum killer' now faces its own mortality moment—proving once again that in crypto, today's technological marvel becomes tomorrow's cautionary tale faster than a Wall Street banker can say 'risk-adjusted returns'.

Solana’s LTHs Ramp Up Distribution

Data from Glassnode shows a steady rise in SOL’s Liveliness over the past few weeks. The metric climbed to a 30-day high on September 21, highlighting increased movement of previously dormant tokens. 

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Liveliness, which tracks the ratio of coin days destroyed to the total coin days accumulated, offers insight into whether LTHs are keeping or spending their coins. 

As with SOL, when this metric climbs, it suggests more long-held tokens are being moved or sold, signaling profit-taking and reduced conviction among long-term investors. 

Further, the negative readings from SOL’s Hodler Net Position Change support this bearish outlook. Per Glassnode, this metric has consistently trended downward and returned negative values since August 27. 

This metric tracks the net position of long-term holders over a given period, measuring whether investors are increasing or reducing their exposure. A positive reading indicates that more coins are being transferred into hodler wallets.

Conversely, when it is negative, it signals that long-term holders are distributing their assets rather than accumulating.

SOL’s persistently negative Hodler Net Position Change highlights that investors who typically stabilize the market are offloading their holdings, adding to the broader sell-off pressure.

Solana Faces $200 Reckoning After Record Futures Liquidations

The reason for the waning confidence among Solana’s long-term holders is not far-fetched. The bearish cloud hanging over the broader market has dragged SOL’s value lower, plunging many bullish traders into steep losses. 

Yesterday, long liquidations on solana futures surged to a year-to-date high, accounting for 97% of all positions wiped out in the coin’s derivatives market.

Such liquidations usually erode confidence among participants who had bet on the coin’s upside momentum and could worsen the selloffs.

In this scenario, the altcoin’s price could fall under $200 again and trend toward $195.55.

On the other hand, new demand entering the market could prevent this. If buy-side pressure gains, SOL’s price could reverse decline and soar to $248.50.