Solana Down 67%, Hit by $28 Million Short Sell-Off—Will It Plunge to $50?

▲ Solana (SOL)

Solana (SOL) is locked in a tense calm before the storm near $86, down 67% from its yearly high, as it braces for massive volatility. While long-term holders are slowing their purchases and whales are ramping up large short bets that add downward pressure, the defense of key support levels and a breakout above resistance will determine whether the token plunges to $50 or rallies toward $129.

According to investment-focused outlet TradingNews on February 22 (local time), Solana has been moving sideways in a narrow range between $85 and $86 after falling from its peak of $253. Trading well below its 50-day moving average ($115) and 200-day moving average ($161), the market remains firmly trapped in a strong downtrend.

Technically, on the 12-hour chart, Solana broke above the neckline of an inverse head-and-shoulders pattern signaling a potential rebound to $129. However, warning signs remain. A hidden bearish divergence has emerged, where prices rise while momentum indicators decline. At the same time, open interest in the futures market surged 6.1% in a single day, and funding rates turned positive. This suggests an influx of highly leveraged long positions betting on a breakout, raising the risk of a brutal cascade of liquidations—a potential bull trap—if the rally fails.

Even more concerning is the behavior of major holders. The 30-day net purchases by long-term holders who have held coins for more than 155 days have halved from 1.98 million SOL in early February to 990,000 recently, indicating fading confidence in further upside. Adding to the pressure, a whale investor has opened a massive $28 million short position using 20x leverage, casting a shadow over the market.

The key supply zone determining short-term direction lies between $87 and $91. In particular, $91.09 marks the thickest concentration of break-even selling pressure. Only a decisive breakout above this level accompanied by substantial trading volume would confirm the inverse head-and-shoulders pattern, potentially propelling Solana past $115 and toward $129.

On the downside, a breakdown of support could trigger uncontrollable panic selling. A fall below $82 would be the first warning sign, and if $76.50—the last line of defense for the recent upward wave—gives way, the next downside target stands at $74.11. Should $67.24 collapse as well, completely invalidating the inverse head-and-shoulders pattern, Solana could face a dreadful scenario of plunging toward the historically significant $50 level, the outlet warned, recommending a “Hold” stance over fresh buying at this stage.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from its use. The content should be interpreted solely for informational purposes.*