Solana (SOL) Price Action

Solana experienced sharp price swings over the weekend as political controversy and market dynamics created turbulence for the fifth-largest cryptocurrency.

Solana price slipped on Sunday as the fifth-largest cryptocurrency faced turbulence from both political controversy and broader market dynamics.

The post Solana faces critical juncture as Trump memecoin drama sparks Bitcoin correlation and futures positioning offers mixed signals appeared first on Chain

Solana fell 3.27% to $171.07 by 09:00 ET (13:00 GMT), extending losses from Friday’s brief spike above $181. The volatility stemmed from a politically charged event involving a Trump memecoin dinner hosted on the Solana chain.

The controversy sparked market jitters and triggered a quick sell-off that saw Solana briefly overtake Binance Coin as the fifth-largest cryptocurrency during the initial surge.

The token is now trading with weekly gains of 7% and monthly increases of 16.9%. It reached a 60-day high of $186 before the recent pullback began.

Derivatives data revealed mixed sentiment, with SOL futures volume dropping 46.4% to $11.31 billion and open interest decreasing 3.8% to $7.35 billion.

Options volume fell even more sharply, decreasing 67% to $653,270, while options open interest rose 2.3% to $10.84 billion.

Liquidation data showed bearish pressure, with long liquidations reaching $6.1 million across major exchanges compared to just $326,000 in short liquidations.

Binance alone saw $2.76 million in long liquidations, which typically signals cooling market conditions or potential trend reversals.

The liquidation wave flushed out overleveraged bullish positions. Recent total liquidations reached $13.4 million, with $12.3 million coming from long positions.

Yet, despite the shakeout, 68.95% of traders on Binance maintained long positions. The long-short ratio stood at 2.22, showcasing persistent bullish sentiment among retail traders.

This lopsided positioning often precedes further volatility. If Solana continues sideways movement or drops lower, these long positions could face additional liquidation pressure.

Whale activity signaled long-term confidence as a newly created wallet withdrew 20,009 SOL, worth around $3.53 million, from Binance on Saturday.

The wallet immediately staked 19,875 SOL, showcasing long-term conviction. The same wallet then sent 134 SOL to another staking address.

With this addition, total staked holdings reached 9,270.4 SOL, amounting to approximately $1.6 million.

This staking activity highlights the belief in Solana's future prospects. However, broader market signals did not yet align to support a strong upward trend.

Solana struggled to break past the key resistance level at $193 as it continues to test the Fibonaci $$187-190 zone for a third time.

The Relative Strength Index also cooled to 61.87 from previous highs. While this level still shows mild bullish control, it lacks the strength needed to confirm a breakout.

Spot market flows on May 25 showed $158.93 million in outflows compared to $141.42 million in inflows. This net outflow suggests that broader market participants are continuing to exit positions despite whale accumulation.

Technical analysis revealed that Solana broke below its ascending channel and the 50-period EMA at $174.56. The MACD indicator also shows a bearish crossover with a widening histogram, indicating selling pressure.

Price is currently testing immediate support at $173.06. A break below this level could target $165.50, then $159.57 and $153.94.

For bulls to regain control, Solana needs to reclaim levels above $178.00 and $182.38. If Bitcoin stabilizes above $106,000, Solana could retest the $187-190 zone with eyes on the $210 target.

However, failure to hold support at $173-174 may trigger a correction toward $170.24 or even $160. The market remains at a critical juncture with mixed signals from derivatives positioning and on-chain activity.