Why Solana’s 15% Crash Might Set Up a Potential Rally

2d ago•

bullish:

bearish:

Solana has declined sharply over the past week, shedding 15% amid a broader market pullback that hit most major altcoins. The Layer-1 coin now trades at $153.53, down from last week’s high near $180.

While the correction mirrors weakness across the crypto market, on-chain metrics suggest this downturn may be nearing its end.

Solana’s Long-Term Holders Show Confidence as Market Cools

Solana’s Liveliness has dropped notably in recent days, indicating that Long-term holders (LTHs) view the recent price decline as a strategic buying opportunity. According to Glassnode, it currently stands at 0.76, its lowest in the past 14 days.

Solana Liveliness. Source: Glassnode

Liveliness measures the ratio of an asset’s coin days destroyed to the total coin days accumulated to track the activity of LTHs. When it climbs, it suggests that more dormant coins are being moved or sold, signaling increased profit-taking by long-term holders.

On the other hand, liveliness decreases when dormant wallets begin accumulating. This trend indicates that SOL’s LTHs are moving assets off exchanges, a bullish sign of accumulation.

Further, the coin’s funding rate has flipped positive and is currently at 0.0041%. This indicates a preference for long positions among SOL futures traders.

Solana Funding Rate. Source: Coinglass

The funding rate is a recurring fee paid between long and short traders in perpetual futures contracts to keep the contract price aligned with the spot price. When positive, long traders pay shorts, indicating that bullish sentiment dominates and more traders expect prices to rise.

SOL Could Surge to $195 if Support Holds

Solana’s price could rebound toward the $171.88 mark if its LTHs continue to double down on coin accumulation and broader market conditions stabilize. Should that price zone solidify as a support floor, it could further propel SOL toward the $195.55 level.