Solana Price News: Short Liquidations for SOL Surpass BTC’s After $90 Breakout

Solana (SOL) is on the move today as the token broke past the $90 threshold. This level has acted as resistance for months, and a move above it seems to be unleashing a dramatic short squeeze.

Trading volumes surged to nearly $5 billion, accounting for almost 9% of the token’s circulating market cap.

However, volumes don’t tell the whole story — liquidations do. According to data from CoinGlass, over $21 million worth of SOL shorts were blown up in the past 24 hours alone. Solana’s 4.5% price hike today is relatively isolated from the overall performance of the market.

As a result, short liquidations for SOL have surpassed those of Bitcoin ($16 million). This is a rare phenomenon but it further confirms our thesis that the $90 level is a key resistance to watch.

Solana ETFs Had Their Best Day Since January

Exchange-traded funds (ETFs) linked to Solana have had a good week with four consecutive days of net inflows. May 6 was an important day for these funds as they brought in $21 million. These are the highest single-day inflows for SOL ETFs on record since January 14.

Higher demand from ETFs could imply that investors are once again embracing top altcoins rather than just Bitcoin (BTC) and Ethereum (ETH). This could also be an early signal that sentiment is shifting.

Macroeconomic conditions continue to be relatively unstable, as the U.S. Federal Reserve is going through a major transition this month. Kevin Warsh will soon replace Jerome Powell as the head of the Fed, and the markets are still expectant about what this will mean for the institution’s monetary policy decisions.

Moreover, the Crypto Fear and Greed Index currently sits at 48 (Neutral). This means that investors are still cautious about the future.

DEX Volumes Keep Dropping as Traders’ Interest in Meme Coins Remains Weak

We have been tracking how DEX volumes and transactions behave to see if the Solana ecosystem is showing signs of coming back to life after the token’s strong downturn.

Thus far, we are not seeing any changes across the DeFi space. DEX volumes continue to be on a downtrend. In April, on-chain data shows that volumes dropped for the third consecutive month, reflecting investors’ disenchantment with DeFi solutions. This also reflects a strong decline in trading activity across the meme coin space.

Meanwhile, using the first 8 days of May as a starting point, a simple run rate of the accumulated total gives us a forecast of $37.5 billion in DEX volumes for this month if the trend continues.

This would mean an 11% decline compared to April, which means that things are not changing much in this front – at least for the time being.

Historical Pattern Signals Big Upside Potential for SOL

Heading to the weekly chart, we have been keeping track of how SOL behaves after the Relative Strength Index (RSI) dropped below 30 for the first time since December 2022. The last time this happened, Solana rallied from $9 to $200, and made some investors rich in the process.

 

There was an exceptional 2,122% return in just 15 months. Although the next bull market might not generate those same returns, Solana could still deliver sizable gains if this historical trend repeats.

Meanwhile, the RSI also crossed above the 14-week moving average. This marked the beginning of Solana’s rally the last time, and it could again now.

Today’s move above $90 is important as it could push the token out of its descending price channel and up to the $110 area.

This would be the key area of resistance to watch as it coincides with the 200-week exponential moving average (EMA). This is a key technical line that the market tends to keep an eye on. If the price rises above this level, the odds of a rally to $200 will increase dramatically.

Solana Still Needs to Prove That This is Not Another “Fakeout”

Heading to the daily chart, we can see what this break above $90 means from a technical standpoint. It is pushing SOL out of a long-dated consolidation pattern and invalidating a bearish flag pattern that had been forming for months.

Once again, in this lower time frame, the $110 – $120 levels emerge as the key resistances to watch. The first of these levels corresponds to the 200-day EMA, while the second is a former demand zone that the market will likely retest in the next few weeks.

The RSI is as bullish as it gets in the daily time frame, as the oscillator rose to 66. This is the highest level it has reached since January. In addition, this tends to be considered as a buy signal, especially if other indicators are signaling a potential cycle bottom at $78.

This is not necessarily the best time to take a long position, as the price still needs to climb above the previous high at $96. We could expect some turmoil at that point, and a pullback to $90 again.

That would be the ideal entry for a long position. This trade would offer a 4.7x risk-reward ratio if the stop price is set at around $84 to give the price enough breathing room.

Buy Signals Pile Up in the 4H Chart

Our system’s signals for Solana have been spot on lately. The buy signal we shared in early April has yielded an 8% return thus far. Right now, we could be about to get another buy signal in the daily time frame if today’s green candle closes as is.

Volumes are already about to surpass the moving average, which means that this breakout is being backed by whales and institutions.

Moving down to the 4-hour chart, we have received four consecutive buy signals for Solana. The last of these just took place after SOL broke above $90. This is typically considered a high-conviction trade as volumes are backing the move.

The RSI in this time frame is still sitting at a high level at 71, meaning that bullish momentum remains quite strong. Hence, everything favors the continuation of this rally, unless the $96 sell wall manages to crash the party.