Solana is showing early signs of stabilization after a sharp market crash. Over the past 7 days, SOL has fallen by approximately 15.5%. The decline intensified when the overall market fell from January 31st to February 1st.
Solana fell to a low point of $95.87 before finding support. Since then, Solana’s price has rebounded nearly 8% and is currently trading around $103.15.
This rebound erased most of the recent daily losses. More importantly, it has been supported by improved capital flows and stable behavior from long-term holders. These signals suggest that strong buyers are entering the market. However, risks still remain. Whether this recovery turns into a sustained rally depends on the critical $120 level.
Sponsored Sponsored
Big money approaches support, breakdown goal achieved
Solana’s recent decline follows a clear technical pattern. On the daily chart, SOL price completed an up-down break in late January. The downside target from this structure pointed to the $95-$96 zone.
That goal was almost perfectly achieved at $95.87.
Once this level was reached, selling pressure subsided and buyers began to intervene. This change can be seen in the Chaikin Money Flow (CMF). CMF uses price and volume to measure whether capital is flowing into or out of an asset. When the CMF rises, it suggests that large investors are accumulating money.
From January 27th to February 3rd, the price of SOL was on a downward trend, but CMF was on the rise. This is known as a bullish divergence. This means that money continued to flow into the market even as prices fell.
Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.
This behavior is not common during rapid corrections. CMF typically falls with price. In this case, the rise in CMF suggests that whales, or perhaps financial institutions, found the $95-$96 zone attractive.
CMF is currently moving back towards the zero line. A rise above zero confirms that buying pressure exceeds selling pressure. If that happens, the chances of a rebound will increase even more. So far, this data shows that Solana’s support near $96 was no fluke. It was protected by big capital.
Sponsored Sponsored
Long-term holders remain patient, but short-term risks are rising
A strong rebound usually requires support from long-term investors. In the case of Solana, that support can be seen in the Vitality data.
Vitality measures how often long-held coins are spent. When the market becomes more active, long-term holders sell. When it falls, they hold.
Over the past month, Solana’s vibrancy has been on the decline.
Even during the sharp drop from $127 to below $100, exuberance did not meaningfully spike. It continued to decline, except for a temporary rise from January 29th to 30th. This suggests that long-term holders panicked and did not sell. Instead, they persevered.
This behavior supports the idea that the recent decline is likely to be temporary rather than structural. However, not all holder groups are available.
Sponsored Sponsored
HODL Waves shows how long different investors are holding a coin. Helps identify which groups are buying and selling. According to recent data, the 1-day to 1-week cohort saw its holdings increase from about 4.38% to 5.26% from December 31st to February 1st.
This group represents short-term speculative traders.
They tend to buy the dip and sell quickly to rebound. As their presence increases, volatility increases. Rising prices also increase the risk that the bull market will quickly weaken.
So while long-term holders are expressing confidence, short-term traders are becoming more aggressive. This creates a mixed structure. It supports a short-term rebound, but limits the extent to which it can rise unless CMF, or rather institutional demand, spikes or rises above the zero line.
Key Solana price levels and why $120 is the real test
Although momentum is improving, risks remain and Solana’s price level is now more important than the index.
Sponsored Sponsored
The first significant support remains the $95.87-$96.88 zone. This area marks completed breakdown targets. As long as SOL is above it, the rebound structure will remain in place. If this zone fails, the downside risk widens towards $77. If that happens, most bullish settings will be invalidated.
On the upside, the first near-term hurdle is near $103.60. Solana is currently testing this area. A daily close above this would indicate near-term strength.
But the most important level is $120.88. This level is important for three reasons.
Firstly, this marks a major breakdown point from January 29th. Second, it closely aligns with the 20-day Exponential Moving Average (EMA). EMA tracks recent price trends and acts as dynamic resistance in a downtrend.
Third, Solana’s last successful recapture of this zone led to a 17% rally in early January. A return to $120.88 at the close of the day would indicate that momentum is returning to buyers. It also indicates that the adjustment phase is ending.
Beyond $120.88, the next resistance level for Solana price lies around $128.29. A break here could open the door to $148.63 as part of a rescue rebound.
However, this upside scenario is dependent on continued capital inflows and stable long-term holding behavior. If short-term traders dominate the volume, the rally could stall before reaching these goals.
