Solana Crashes Hard - And Big Money Isn't In A Hurry To Save It

Solana (SOL) has fallen below $100 amid broad-based weakness in the cryptocurrency market. The token has lost more than 6% in the past two days, bringing total losses for the week to over 23%. Institutional and retail demand for the high-performance blockchain asset has weakened despite record transaction volumes.

The sell-off has accelerated unrealized losses for major digital asset treasuries. Artemis data shows companies like Strategy and BitMine Immersion Technologies hold $9.2 billion and $8.4 billion in paper losses, respectively. These firms are among the most heavily invested in cryptocurrencies, with Strategy holding 713,502 Bitcoin and BitMine holding large Ethereum positions.

Upexi, a Solana-focused treasury company, announced a $7.4 million registered direct offering on February 6. The company is issuing 6,337,000 shares at $1.17 per share with attached warrants. Proceeds will fund its Solana-focused investment strategy as the broader market continues its decline.

Why Did This Happen?

Solana's price has been under pressure from weak macroeconomic conditions and reduced speculative interest. Open interest in SOL derivatives has fallen to $6.37 billion, a 1.24% drop in 24 hours. Long liquidations have outpaced short liquidations by more than five times.

The derivatives market shows strong bearish sentiment. The OI-weighted funding rate has turned negative at -0.0238%, indicating traders are paying a premium to maintain short positions. This reflects increased risk-off sentiment across crypto markets.

How Did Markets React?

Market participants have shifted focus from speculation to infrastructure development. SONAMI, a Layer 2 solution for Solana, announced Stage 9 of its development roadmap. This includes performance improvements and modular scalability features aimed at supporting enterprise-grade applications.

The sell-off has also exposed structural weaknesses in Solana's ecosystem. While on-chain metrics like transaction throughput remain strong, declining investor confidence has limited the token's upside potential. Long-term holders have reduced their net positions by nearly 17% in two days.

What Are Analysts Watching Next?

Analysts are closely monitoring key support levels for Solana. The token currently trades near $96, with the next major downside target near $67 if the descending channel support fails. A sustained move above $106.53 would be required to reverse the bearish technical structure.

The broader market remains cautious. The Fear and Greed Index sits at 14, indicating intense risk-averse sentiment. This environment favors further declines unless there is a significant shift in macroeconomic conditions or renewed institutional buying.

Short-term holders have increased their share of the supply from 4.49% to 6.08% in just two days. This rise in speculative activity suggests the current rebound may be fragile. Historical patterns show such buying often leads to rapid reversals when momentum weakens.