Solana Outflows Trigger First Capitulation Signal Since 2022 as Selling Pressure Intensifies

Solana (SOL) is experiencing increased selling pressure as $202 million worth of tokens have moved to exchanges since the start of February. This has triggered a capitulation signal not seen since 2022, indicating late-stage bear market conditions. On-chain data reveals that 2.35 million SOL have been deposited into exchange wallets, amplifying downward price momentum and increasing liquidity for short-term traders.

The current price action shows Solana consolidating between $75–$90 after a sharp decline from its $293 all-time high in January 2025. This price range suggests market uncertainty, with bulls attempting to push above the $90–$100 resistance level. A breakout could attract renewed buying interest and potentially lead to a price recovery.

Despite the bearish trend, historical fractal patterns indicate that Solana could experience a significant rally if past cycles repeat. In previous cycles, SOL rallied from $1.07 to $260 in Cycle 1 and from $7.78 to $295 in Cycle 2. If these patterns hold, long-term price targets range from $500 to $1,000.

Why Did This Happen?

The recent outflows and capitulation signal are attributed to heightened market pressure and investor uncertainty. Solana Company (HSDT), backed by Pantera Capital, has allowed early investors to sell shares acquired in a $500 million PIPE round. This decision comes amid a 60% decline in the stock price from its initial purchase price, signaling weak investor sentiment.

Additionally, Bitcoin whales are shifting capital to Ethereum, recognizing its broader smart contract economy and staking yields. This trend reflects a broader market maturity and suggests that Ether is becoming a core holding rather than a speculative side bet. This shift in capital allocation may also affect altcoins like Solana, as investors explore diverse use cases in the digital asset space.

How Did Markets React?

Market participants are closely watching key price levels to determine Solana's next move. Solana is currently trading above $85 support but has repeatedly failed to break the $92 resistance level. A successful breakout above $92 could open the door to $95, with further gains potentially pushing the price toward $102. However, failure to clear $92 could lead to a downward move to $76.50 or even $72.

The market is also tracking exchange liquidity as a key factor in Solana's price direction. With exchange reserves rising, traders may find it easier to execute sell orders, increasing downward pressure. If the price remains below $90, continued exchange inflows and weak macro momentum could pressure Solana further. A decisive break above $90 could attract renewed capital inflows and potentially lead to a price recovery.

What Are Analysts Watching Next?

Analysts are monitoring several key factors to determine the next phase for Solana. A sustained move above $96–$100 could attract new buying interest and potentially lead to a price recovery above $100. On the other hand, a failure to break above the mid-$80 resistance area could result in further downward movement to $70 or even $60.

Institutional interest in Solana is also a point of focus. Improving inflows into US-listed spot SOL ETFs indicate growing institutional interest in the asset. Additionally, Solana's ecosystem is showing resilience, with active developers and new decentralized applications being built despite the price decline.

Transaction activity on the Solana network has reached all-time highs, making it one of the most active blockchains in the market. However, this activity has not translated into price gains, creating a discrepancy between network usage and market valuation. Analysts are divided on whether the recent rebound is a short-lived bounce or a sign of a more significant recovery.

As the market continues to evaluate Solana's trajectory, key resistance levels and broader market trends will remain focal points for investors. The outcome of these dynamics could shape the next phase of Solana's price action and influence broader market sentiment in the digital asset space.