Solana's Long Liquidations Surge 1800% Amid Market Caution

Solana's recent market activity has shown a mix of bullish and bearish signals, leaving investors with a complex outlook. On one hand, a newly created wallet withdrew 20,009 SOL, worth approximately $3.53 million, from Binance and immediately staked 19,875 SOL. This wallet also sent 134 SOL to another staking address, raising the total staked holdings to 9,270.4 SOL, equivalent to $1.6 million. This heavy staking activity indicates long-term conviction in the asset, but the market reaction has remained subdued. Investors may interpret this as a quiet confidence building beneath the surface, although broader market signals must align before a strong trend emerges.

On the other hand, long liquidations surged to $6.1 million on the 25th of May, dwarfing just $326K in short liquidations. This stark imbalance reflects the market punishing overleveraged bullish traders amid recent downside price action. Binance alone accounted for $2.76 million in long liquidations, reinforcing the dominance of sell-side momentum. Historically, such liquidation skews often signal a cooling market or potential reversal. Therefore, this could either mark the end of excessive long speculation or hint at deeper bearish pressure building up. The data emphasizes caution, especially for those still heavily positioned on the long side.

Despite the shakeout, 68.95% of traders held long positions in SOL, according to Binance’s Long/Short account data. The long/short ratio stood at 2.22. This shows that most retail traders remain optimistic, even after a heavy liquidation wave. However, such lopsided sentiment often precedes further volatility or shakeouts. If SOL continues its sideways movement or drops lower, these long positions could once again face liquidation pressure. It also suggests a disconnect between trader expectations and actual price momentum. Therefore, despite bullish sentiment, the market still holds significant risk for upside chasers.

SOL traded at $172.34 at press time, still struggling to break past the 0.786 Fib resistance at $193. Despite its recent rebound, momentum has stalled as the Relative Strength Index (RSI) cooled to 61.87 from previous highs. This level still shows mild bullish control, but not strong enough to confirm a breakout. For bulls, reclaiming $193 is essential to target the next Fib zone at $229.46. However, repeated failures here could reinforce a range-bound structure or even invite downside continuation.

Spot market flows on the 25th of May revealed $158.93 million in Outflows compared to $141.42 million in Inflows, resulting in a Net Outflow. This divergence is significant as it suggests that while some whales are accumulating, broader market participants continue exiting positions. Therefore, the short-term price structure remains pressured by ongoing profit-taking or repositioning activity. Even with staking confidence growing, price performance will remain muted unless inflows sustainably outpace outflows. For now, sell-side signals are still present, dampening the impact of bullish on-chain events.

While whale accumulation and staking suggest long-term confidence, the dominance of long liquidations and persistent outflows point to near-term fragility. Unless SOL flips the $193 resistance with strong momentum and inflows improve, upside potential remains capped. Traders should prepare for more consolidation or downside if leveraged bulls continue getting wiped out.