 ▲ Solana (SOL) |
Solana (SOL) managed a temporary rebound after posting a steep decline. However, on-chain data point to an exodus of long-term holders and an influx of speculative capital, warning of the risk of further downside.
According to crypto-focused media outlet BeInCrypto on February 6 (local time), Solana broke below the lower trendline of a descending channel on February 4 and plunged to around $67, nearly 30% down from its recent peak. Buying interest later emerged, lifting the price by more than 15% to around $78, but the overall technical structure remains unimproved. Based on historical patterns, rebounds unsupported by strong accumulation often end as temporary dead cat bounces.
On-chain data suggest that this rebound is being driven more by short-term speculation than by sustained demand. The HODL Waves indicator, which analyzes holding periods by wallet, shows that the share of short-term holders with holding periods of one to seven days jumped from 4.49% on February 4 to 6.08% on February 6. Such participants tend to sell quickly during market weakness, making them an unreliable foundation for a lasting rally.
By contrast, long-term investors holding assets for more than 155 days are reducing their Solana exposure. According to indicators tracking long-term holder positions, their holdings fell by 17% in just two days, from about 2.87 million SOL on February 3 to about 2.37 million SOL on February 5. This imbalance, with short-term buyers increasing while long-term holders exit, signals weak market conviction and highlights the low quality of incoming capital.
For Solana to return to a genuine recovery, it must first reclaim the $93 level. This zone requires an additional rise of roughly 19% from current prices and is critical for any structural improvement and restoration of investor confidence. Above $93, the $105 and $121 levels, where previous breakdowns began, are expected to act as strong resistance. Until these key resistance levels are cleared, every upside attempt faces a high risk of selling pressure.
On the downside, the recent low near $67 is the most important support. If the $67 level breaks, the next target is likely to be around $59. Should $59 also fail to hold, a wave of sell-offs by short-term traders combined with further exits by long-term holders could push the market into a deeper correction. Without a slowdown in speculative activity and a return of long-term accumulation, the current rebound remains fragile and vulnerable to a sharp reversal at any time.
Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on its contents. It should be interpreted solely for informational purposes.