- Solana broke free from weeks of lateral action with a clean recovery of $ 170.
- Is this the start of a larger trend remote, or just a breakout fake out?
After weeks of accessible Chop, Solana [SOL] Meg with a revenge and break out to a highest point of two months of $ 164 on 8 May.
The Golf stabbed the charts and pushed the RSI deep into overbought territory – music to the ears of Bearish traders.
Feeling a potential exit summit, Korte -Schelers swarmed in it and stepped up lifting tree positions in the hope of catching a sharp reversal. What unfolded instead was a short squeezing text book, in which late bears were overwhelmed.
But was this just a volatility blue in a turbulent reach, or does Sol build the structural momentum that is needed for a complete trend removal?
The Great Bear fails
As Ambcrypto stated earlier, the Solana outbreak above $ 170 was not just a random peak. It was supported by solid structural demand and clean technical coordination.
Bulls performed with conviction with an important psychological resistance, which turns around in support and a high-fomo food zone on a strong volume. Consequently, almost $ 20 million in short positions were wiped out.
Lookonchain data has recorded in this way aggressive bet. A wallet collapsed $ 1.21 million in USDC to open a 20x lever deficiency on Sol for $ 164.9.
The position balloon to 97.5K Sol, with a tight liquidation level at $ 172.96. If SOL inch is higher, that trade risks a forced exit. Another short squeeze brewing? All signs indicate yes.
Solana’s risk zone: the price of conviction
At the time of the press, Solana traded at $ 171.87 and set up a potential liquidity trap for bears – again.
But the fate of this rally is based on the conviction of the bull. If Fomo fades, what was once bullish Momentum could quickly turn in a sharp reversal.
Signs of weakness begin to arise. Solana’s Active address number Has fell sharply from 6.10 million to 5.40 million, which represents a decrease of 11.46% in a single day.
In addition, the MVRV ratio (market value and realized value) is now comfortable above 1, which suggests that SOL is traded well above the realized cost basis.
Source: Glassnode
In other words, the market flirts with overvaluation prime conditions for a potential profit cycle to kick in.
Shorts Are positioning himself based on this on-chain Signals. When structural question Remains weakened, they can benefit from the potential disadvantage.
Solana is without a doubt in a gamble with high bet. The momentum leans Bullish, because market -wide FUD is on a break.
But a complete rally? That still feels like a piece. Bears are still in the mix and wait for the right signal to turn the trend.