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Solana (SOL) experienced a sharp 9.5% decline amid significant long liquidations, yet technical indicators suggest the underlying bullish trend remains intact.
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The correction was driven by a long squeeze triggered by elevated funding rates and bearish divergences in futures cumulative volume delta (CVD), signaling profit-taking among traders.
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According to COINOTAG analysis, support at $180 and a recent golden cross between the 50-day and 200-day EMAs point to a potential continuation of the upward momentum.
Solana’s 9.5% dip follows a $30M long liquidation but key technical signals like support at $180 and a golden cross suggest bullish momentum remains strong.
Solana’s Price Correction Amid Long Liquidations and Market Dynamics
On July 2025, Solana (SOL) saw a notable price drop of 9.5%, falling from $205 to $186, marking its most significant daily decline since early March. This correction coincided with a $30 million liquidation of long positions, triggered by an all-time high open interest of $12 billion in SOL futures. Despite this pullback, the price remains approximately 36% below its all-time high, indicating that the market is still digesting prior gains rather than entering a bearish phase.
Market data reveals that the aggregated futures cumulative volume delta (CVD) exhibited a bearish divergence, declining steadily even as prices climbed. This suggests that futures sellers were incrementally increasing their positions ahead of the correction. Furthermore, funding rates surged to their highest levels in the past quarter, reflecting an overcrowded long trade environment. These factors combined to create a classic long squeeze scenario, forcing leveraged traders to exit positions rapidly and amplifying the downward price movement.
Technical Indicators Highlight Key Support and Bullish Signals
Despite the recent volatility, technical analysis points to a resilient bullish structure. The $180 price level has emerged as a critical support zone, confirmed by a bullish break of structure (BOS) earlier in the week. This level represents the first major bullish trend shift on the daily timeframe since November 2024, reinforcing its significance.
Additionally, SOL recently experienced a golden cross, where the 50-day exponential moving average (EMA) crossed above the 200-day EMA—a historically reliable bullish indicator. The previous occurrence of this crossover in late 2023 preceded a remarkable 730% price surge over several months. Maintaining support above $180 could therefore signal a continuation of this upward trajectory.
Potential Scenarios and Strategic Considerations for Traders
Traders should monitor the $180 support closely, as a sustained hold would likely attract renewed buying interest and reinforce bullish momentum. Conversely, a failure to defend this level may expose SOL to a deeper retracement toward the $168–$157 range. This zone aligns with a daily fair value gap and the 0.5 to 0.618 Fibonacci retracement levels, commonly regarded as high-probability areas for price reversals or consolidation.
Given the recent volatility and technical setup, investors are advised to adopt a measured approach, considering both the potential for a healthy pullback and the overarching bullish signals. Risk management remains paramount, especially in light of the elevated open interest and funding rates that contributed to the recent long squeeze.
Conclusion
Solana’s recent 9.5% correction, driven by a significant long squeeze, represents a natural market adjustment following a strong rally. Key technical indicators, including support at $180 and a golden cross formation, suggest the bullish trend remains intact. Traders should watch these levels closely to gauge the next phase of price action, balancing optimism with prudent risk management in a dynamic market environment.
