If the pattern repeats April's setup, reignition could take around four more weeks, lining up with early January.
Solana News
Solana on-chain data shows liquidity has contracted to bear market levels, with roughly $500 million in leveraged long positions facing liquidation if the price drops 5.5% to $129. The major altcoin's 30-day average realized profit-to-loss ratio has traded below 1 since mid-November, indicating realized losses exceed profits.
A ratio below 1 signals that liquidity has retreated significantly, according to on-chain analytics platform Glassnode. This contraction represents a "full liquidity reset" for Solana, a pattern that has historically preceded bottoming phases and the start of new liquidity cycles.
Altcoin Vector analysts noted the reset is being driven by realized losses prompting sell-offs, a decline in futures open interest, market-makers pulling back, and liquidity fragmenting across trading pools. If the pattern repeats April's setup, reignition could take around four more weeks, lining up with early January.
Wenny Cai, COO of SynFutures, explained that while the mid- to long-term outlook remains slightly bullish, especially if macroeconomic overhangs clear, the near term remains noisy and susceptible to shocks. The market faces competing forces between structural support and liquidation risk.
Structural bullish support is materializing through persistent outflows of Solana from exchanges, reducing readily available sell-side supply. Capital continues flowing into spot Solana ETFs, which have accumulated $17.72 million in net inflows this week, nearly matching last week's $20.30 million haul, according to SoSoValue data.
Ryan Lee, chief analyst at BitGet, stated this presents an opportunity for strategic accumulation and network upgrades, fostering long-term resilience and innovation in the Solana ecosystem. However, leverage market conditions remain tense despite these underlying bids.
Bitcoin's muted price action and large liquidation spikes indicate that leverage remains relatively high across the broader crypto market, with $432 million in liquidations over the past 24 hours according to CoinGlass data. With Solana rising 3.2% over 24 hours, $15.6 million in positions were forced to close, making it the third-largest liquidated asset behind Bitcoin and Ethereum.
The spike in liquidations followed Bitcoin's bounce, though $500 million in long positions would be liquidated if Solana drops to $129. Lee added that such a drop would signal a healthy market reset, clearing excess leverage and paving the way for renewed institutional inflows and a stronger rebound.
On the flip side, a near 3% move upward would catalyze $110 million in short covering, adding more fuel to Solana's recent bounce.
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