Solana (SOL) experienced a 5% correction, bringing its price near $145. This drop has breached vital technical supports. Furthermore, it raises the risk of mass liquidations on Solana for leveraged traders. The situation is creating tension in the market.
In recent hours, SOL lost key psychological levels, including $150 and the $153-$156 range. Technical analysts are closely watching the $145 support. If this level fails to hold, the next targets could be $121.50 or even $100. Concurrently, trading volume has increased significantly, a sign suggesting asset distribution rather than accumulation.
The market presents a notable divergence. On one hand, Solana-linked products (ETFs) show strong inflows. These products have accumulated between $351 million and $417 million. They have recorded 11 consecutive days of positive flows. On the other hand, on-chain activity is weakening. Active addresses fell to 3.3 million, a 12-month low. Likewise, the user base in DeFi has shrunk by 50% since June.
Are Institutional Investors Buying While Retail Users Flee?
This situation complicates the asset’s valuation. Market sentiment is at “Extreme Fear” (index of 25). However, the derivatives market shows strong bullish leverage. The long/short ratio exceeds 4.6 on major exchanges. This high concentration of long positions is dangerous. If the price continues to fall, it could trigger a domino effect of forced liquidations. Bloomberg analyst Eric Balchunas mentioned that a Solana ETF approval is “100% certain,” which fuels institutional interest.
Immediate attention is focused on SOL’s ability to hold the $145 support. Losing this level would extend the current correction. The market is watching to see if the divergence resolves. It remains to be seen if institutional accumulation will win out or if the price will yield to weak on-chain activity. The risk of mass liquidations on Solana remains the dominant short-term factor.
