Solana Leads DEX Volumes Amid Market Uncertainty
Key Takeaways
- Solana (SOL) is seeing a growing number of short positions despite strong network usage.
- The long/short ratio has dropped to a 30-day low of 0.865 – indicating a highly bearish market sentiment.
- At the same time, Solana leads DEX volumes with over USD 22 billion in one week.
- Technical indicators point to short-term uncertainty – with potential for movement in either direction.
Short Positions Against Solana Are Increasing
Currently, many traders are betting against Solana. This is clearly reflected in the long/short ratio, which fell to 0.8653 on May 13. This means that approximately 53.6% of all positions are short, anticipating a price drop. Only 46.4% of traders are betting on rising prices.
Such a low ratio is unusual – especially for a project that simultaneously shows strong fundamentals. In the past, such imbalances often preceded significant price movements. This could either lead to a short squeeze (a sudden price surge that forces short positions to close) or confirm a downward trend.
Solana Leads in DEX Volume
Despite the scepticism among many traders, Solana is showing strong network activity. Over the past seven days, approximately USD 22.4 billion has been processed via Solana on decentralized exchanges (DEXs). This puts the network well ahead of Ethereum, which reached around USD 16 billion in the same period.
Solana also maintains a clear lead over other competitors such as Binance Smart Chain (BSC), Base, or Arbitrum. Contributing factors include low transaction fees and high processing speed – both of which attract traders and liquidity.
Market Psychology vs. Fundamentals
The current situation highlights a clear discrepancy: while Solana is strong in terms of technology and usage, many traders are expecting a price decline. This could indicate a misjudgment – or simply short-term hedging strategies.
Such divergences between fundamentals and market behaviour are often precursors to volatility. Long-term investors should place greater emphasis on network activity than on short-term market sentiment.
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Technical Analysis: What Does the Price Say?
At the time of analysis, the SOL price was around USD 174.53. After a strong rally in early May, the price is currently consolidating. The Relative Strength Index (RSI) is at 71.83 – a level that suggests overbought conditions. This could limit upward potential in the short term.
However, the MACD (Moving Average Convergence Divergence) still shows a bullish signal. The line remains above the signal value – indicating continued upward momentum.
Key Price Levels:
- Resistance: USD 176 – if broken, potential target between USD 185 and USD 190.
- Support: USD 170 – if breached, a decline to around USD 160 is possible.
Our Assessment
Solana is currently caught between strong network performance and bearish market sentiment. The high number of short positions could lead to a short squeeze – provided the price remains stable or continues to rise.
At the same time, the fundamentals show that Solana continues to be heavily used. For long-term investors, this can be seen as a positive signal. In the short term, however, caution is advised – especially if the USD 170 support level does not hold.
Sources
- Coinglass
- TradingView
- X (formerly Twitter)
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