Solana's 15% Bounce: A Liquidation-Driven Rally or a New Trend?

Solana's price has staged a sharp rebound, climbing more than 15% from an intraday low of $67.31. The token is now trading near $83, a move that has fueled early optimism. Yet the flow behind this bounce tells a story of forced selling and speculative positioning, not a fundamental shift.

The catalyst was a massive liquidation event exceeding $300 million in derivatives, which fueled the sharp initial drop. This forced selling pressure was met with a surge in trading volume, which jumped 49% to $13.34 billion during the weekly decline. Elevated volume on the way down signals strong conviction from sellers, not exhaustion. The subsequent price recovery is therefore likely a short-covering rally, where traders who bet against the price are buying back to cut losses.

In reality, this is a classic speculative bounce. The volume surge and liquidation data point to a market where positions were unwound aggressively, not where new long-term capital is flowing in. The recovery lacks the sustained accumulation from long-term holders needed to confirm a durable reversal. For now, the bounce appears to be a technical relief move, not a sign of renewed structural demand.

Technical Structure and Key Levels

The price action has broken the established structure, signaling a shift in momentum. Solana decisively broke below its descending channel on February 4, triggering a steep decline that saw the token plunge nearly 30% to a low of $67.31. This breakdown, confirmed by a drop below the $100 Point of Control, indicates a structural shift to the downside. The subsequent rebound is therefore a corrective bounce within a deteriorated trend, not a reversal.

Critical support levels are now in focus. The immediate floor is the $77–$78 region, where the price recently found some buying interest. A break below the $80–$82 zone would risk a deeper drop toward the $70 support level. The daily chart shows a descending wedge pattern, a technical formation that historically precedes a meaningful upside expansion if resolved to the upside. However, the current setup lacks the volume and conviction needed to confirm a breakout from this pattern.

The bottom line is one of vulnerability. While the wedge offers a potential path higher, the immediate technical picture is bearish. The market must first reclaim and hold above the $80–$82 area to negate the risk of another leg lower. Until then, the structure remains fragile, with the recent bounce appearing more like a short-term relief move than a durable trend change.

On-Chain Sentiment and Valuation

The on-chain picture reveals a market in a state of deep unrealized pain, which often sets the stage for a stabilization phase. Solana's Market Value to Realized Value (MVRV) ratio is currently reading 0.65, its lowest level since September 2023. This extreme reading places the token firmly in undervaluation territory and signals that the majority of holders are underwater. Historically, prolonged compression at these levels reduces immediate sell-side urgency, as participants shift from distribution to patience, waiting for mean reversion.

This environment of widespread losses frequently precedes a basing phase. The data shows that despite the drawdown, larger participants have been accumulating. From December 2025 to the present, investors have absorbed approximately 5 million SOL, valued at $455 million. This steady absorption during weakness points to sustained conviction among long-term buyers, a pattern that has historically supported Solana's medium-term trend reversals.

The bottom line is one of conditional recovery. For the bounce to be sustained, Solana must reclaim the $93-$95 resistance zone to signal a structural improvement. More importantly, long-term accumulation needs to resume and outpace the distribution from holders. The current setup-a low MVRV, patient holders, and a key resistance level-suggests the market may be finding a floor, but it remains vulnerable to another leg lower if the $93-$95 zone fails to hold.