Solana (SOL) is currently re-testing the breakout zone around the $157 mark – a sign that the market may be entering a strategic accumulation phase.
Notably, the price movement coincides with the Fibonacci extension level of 1.618 near the $178 area, reinforcing the possibility that the bulls are quietly planning a strong acceleration in the near future.
As of the time of writing, SOL is trading around $162.30 — just below the critical resistance layer. The current price structure suggests that this may only be a temporary correction, aimed at consolidating the upward trend in the medium term.
If Solana continues to hold above the support line, renewed buying pressure in the upcoming sessions could push the price towards the next target around $185.
Bullish reversal signal?
On the daily timeframe, Solana is completing the cup and handle pattern, with the cup bottom established around the $131 area, while the handle is currently accumulating just below the important resistance area at $166.
This is a familiar bullish continuation pattern, reflecting increasingly strong confidence from investors. Once the neckline is conquered, this pattern often opens up opportunities for a strong breakout.
In the past, cup and handle formations have led to impressive bullish cycles – especially when combined with steady buying pressure and favorable market conditions.
If the bulls can successfully turn the $166 zone from resistance into support, SOL is likely to move towards the $185 mark, before targeting the model goal around $220.
Investor confidence in Solana remains strong.
Solana is witnessing a steady net outflow from exchanges, with $7.58 million withdrawn on July 13th alone.
Continuous outflows from exchanges indicate that investors are transferring SOL to storage wallets, reducing the available supply for short-term selling.
This often signals positive sentiment and expectations of future price increases, as investors prioritize long-term holding over taking profits.
This accumulation trend contributes to a more sustainable accumulation phase and could set the stage for the next price increase, as long as buying pressure remains sustained.
As the circulating token supply on exchanges continues to shrink, the market is gradually shifting to a balance favorable to the bulls – an ideal condition for continued upward price pressure.
Is Solana's new rally due to Short position liquidations?
On July 13th, Solana recorded a surge in Short liquidations, with a total value of up to $555,000, compared to only $71,000 in Long liquidations.
This significant gap indicates that short sellers have been 'caught off guard,' leading to a short squeeze as stop-loss orders and liquidations had to be triggered.
It is worth noting that the majority of the Short liquidations came from two major exchanges, Binance and Bybit, reflecting that the betting on a downward trend is still quite prevalent.
Liquidation events like this often serve as 'catalysts' for significant price increases, especially when they occur near important resistance levels. If bears continue to flee, Solana could fully leverage this momentum to break through the $166 level and open a new growth phase.
Is Solana ready for the next breakout?
The technical structure of Solana is showing a highly potential bullish pattern, reinforced by a valid 'cup and handle' formation and solid support lines.
The combination of outflows from spot exchanges and a growing wave of Short liquidations is contributing to increased confidence in SOL’s upward momentum. However, the key factor remains the ability to break and hold the important resistance level at $166.
If the bulls succeed in turning this area into support, Solana's upward momentum could be pushed to the next milestones at $185, or even further to $220. In the meantime, the price range from $157 to $166 will remain a critical area that needs close monitoring.