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Solana showed the first signs of stabilization after a market collapse. In the last seven days, Solana is down about 15.5%. The decline intensified during the broad market sell-off between January 31 and February 1.
Solana reached a low of $95.87 before finding support. Since then, Solana’s price has risen by about 8% and is now trading around $103.15.
This rebound has erased most of the recent daily losses. Importantly, the improvements in capital flows and the long-term behavior of the owner of Solana supported this recovery. These signals indicate that strong buyers are starting to enter. But the risks remain. Whether this recovery will now turn into a sustained rally depends on a key level: $120.
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The goal of discovery was achieved with a large amount of money entering the support
Solana’s recent descent followed a clear technical pattern. On the daily chart, Solana’s price completed a head and shoulders pattern at the end of January. The target of this downside pattern indicated the area of ​​$95-96.
This goal was reached almost perfectly at $95.87.
After reaching this level, selling pressures slowed, and buyers began to enter. This change is clearly visible in the Chaikin Money Flow (CMF) indicator. CMF measures whether capital is flowing in or out of a given asset using price and volume. When the CMF rises, it indicates that large investors are accumulating.
Between January 27 and February 3, the price of Solana gradually decreased, but the CMF index rose. This is known as a bullish divergence. This means that even when the price weakened, money continued to flow into the market.
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This behavior is uncommon during severe corrections. Usually, the CMF indicator decreases with the price. In this case, a rise in the CMF indicates that whales or perhaps institutions have seen the $95-96 area as an attractive opportunity.
The CMF indicator is now moving back towards the zero line. If this line crosses higher, it confirms that the buying pressure is above the selling. This will strengthen the rebound case. So far, this data shows that Solana’s support near $96 was not accidental. It was defended by a large capital.
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Long-term holders remain patient, but short-term risks increase
Strong recoveries are typically supported by long-term investors. In the case of Solana, this support is shown in activity data.
Activity measures how often coins are spent over a long period of time. When activity increases, this means that long-term holders are selling. When it goes down, it means they hold it.
Solana’s activity has decreased in the past month.
Even during the sharp decline from $127 to below $100, activity did not recover significantly. Apart from a slight increase around January 29-30, it continued to decrease. This suggests that long-term holders did not sell out of panic, but rather remained patient.
This behavior supports the idea that the recent decline is seen as temporary rather than structural. However, not all groups of holders are compatible.
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HODL waves show how long different investors hold their currencies. It helps determine which groups to buy or sell. The latest data shows that the one-day-a-week group increased its participation from about 4.38% to 5.26% between December 31 and February 1.
This group represents short-term speculative traders.
They tend to buy dips and sell quickly in rallies. Their increased presence increases volatility and increases the risk that recoveries will fizzle out when prices rise.
Therefore, while long-term holders show confidence, short-term traders become more active. This creates a hybrid structure; It supports short-term recoveries, but limits how strong they can be unless the CMF or rather institutional demand increases or exceeds the zero line.
Key points of the article about Solana price levels and why $120 is the real test
Highlight the price levels of Solana currently compared to the index, with the momentum of improvement, but the risks are still present.
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It holds the first critical support in the area of ​​$95.87–$96.88. This area marks the goal of complete decline. While Solana stays on top, the rebound structure stays in place. If this zone fails, a downside risk towards $77 opens, invalidating most of the bullish formations.
Look on the side that the first obstacle near the term is located around $103.60. Solana is currently testing this area. A sustained daily close above indicates short-term strength.
Consider that the most important level is $120.88. This level is important for three reasons.
First defined as a major low point from January 29. Second, it moves close to the 20-day Exponential Moving Average (EMA). The EMA follows recent price trends and acts as dynamic resistance in downtrends.
It adds third that Solana’s last successful recovery of this area in early January led to an increase of 17%. The recovery of $120.88 on the daily close indicates that the momentum is moving towards the buyers. It also indicates that the correction phase is nearing its end.
Determine that above $120.88 the next resistance for the price of Solana is located near $128.29. A breakout of this level could open the way towards $148.63 as part of a corrective rebound.
Stop by, but understand that this bullish scenario is based on a continued capital flow and long-term stable behavior. If short-term traders dominate trading volume, rallies may stall before reaching these targets.
