Solana Gains 2.14% as Short Liquidations and Positive Funding Rates Fuel Bullish Momentum

Solana (SOL) has been on an upward trajectory, reclaiming bullish momentum as it approaches a critical resistance zone between $176 and $188. At the time of writing, SOL had gained 2.14% in the last 24 hours, trading at $171.47. This recovery is supported by both technical indicators and derivatives activity, with signs of short-side vulnerability just above current levels.

Liquidation heatmaps reveal a dense layer of overleveraged short positions stacked between $170 and $176. With SOL already hovering around $171, a decisive move above $176 could trigger a cascade of liquidations, driving further upside. On May 18th, total short liquidations exceeded $1.72 million, while long liquidations remained negligible. This imbalance suggests a classic setup where bulls could ignite upside volatility, accelerating the move with a cascade of short liquidations.

Funding Rates on Binance turned slightly positive at 0.008% after weeks in the red, indicating a growing willingness among traders to hold long positions. This shift signals a sentiment change, with cooling bearish bias and increasing trader confidence in Solana’s upside potential. Sustained positive funding could attract more leveraged longs, reinforcing bullish momentum.

Social Dominance for Solana climbed to 5.18%, recovering from a multi-week decline. This uptick suggests renewed interest among retail investors, typically seen during early bullish phases. Although the current level is still below the March spike, it highlights growing community engagement. If the price breaks resistance, social traction may intensify and further amplify bullish momentum.

Technically, Solana remains above the 1.618 Fibonacci extension at $163.16, a critical support level that has held through recent volatility. The MACD shows convergence near the zero line, signaling a possible bullish crossover in the coming days. These patterns reinforce a scenario where SOL could reclaim $176 and head toward the next targets at $189.88 and $198.13, defined by higher Fib levels. Momentum indicators are gradually strengthening, boosting the breakout probability.

Solana’s Development Activity remains firm at 23.38, showing that builder confidence hasn’t wavered. Although activity dipped slightly from earlier peaks, it continues to signal confidence from builders and maintain network fundamentals. Consistent development helps solidify long-term investor confidence and can support price rallies built on more than just speculation.

All metrics point toward a possible breakout as SOL tests a historically significant resistance range. From liquidation pressure and rising social interest to strengthening technicals and stable development, the ingredients for a rally are in place. If bulls clear the $176–$188 zone, Solana could initiate a sustained push toward higher extension targets.