Do the Technical Signals Validate the Breakout?
Solana has just broken out of a descending channel that had constrained its price for several months, a technical signal that radically changes the market narrative. Currently trading around $140, the SOL token is testing sellers’ resilience. The MACD indicator has turned green, confirming that momentum has clearly shifted to the buyers’ camp.
However, a divergence calls for caution. While the price is climbing, on-chain data reveals that new wallet creation has plummeted, dropping from 30 million in November to approximately 7 million recently. This rally therefore appears to be driven by speculation from existing traders rather than new organic adoption. The $145 level is acting as an immediate glass ceiling: a firm close above is imperative to validate the trend.
Short Squeeze Ahead: $170 in Sight?
The market is showing signs of nervousness among bears. Recent data indicates that liquidations of short positions (approximately $7.24 million) far exceed those of longs. This potential short squeeze dynamic could act as explosive fuel.
Indeed, the probability of a return to the zone between $154 and $170 in the coming weeks is much higher than for the opposite scenario.
The general sentiment, shared by the crowd and smart money, remains predominantly bullish. Traders seem ready to front-run the breakout, anticipating an acceleration in volatility. However, as long as the price remains below this key threshold, the risk of a rejection towards the $130 accumulation zone cannot be ruled out. Volumes will need to follow through to confirm that this move is not just a flash in the pan.
Solana’s market structure is at an inflection point. With buyers aggressively defending the lows and selling pressure exhausting itself, the probabilities lean towards a bullish breakout. If the breakout above $145 is confirmed with volume, SOL could quickly outperform the rest of the altcoin market. Traders must now monitor the price reaction at this pivot level: an explosion above could mark the beginning of a new bullish cycle towards $170.
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