Solana short traders deploy $730M leverage as SOL price hits seven-month lows: Hold or Sell?

Solana price tumbled towards $115 on Monday, posting 24.5% in losses over the last five days. Derivative markets data suggest SOL bears could press for more downside in the coming sessions. 

Solana (SOL) traders capitulate after losing two key support levels

Solana price tumbled towards $115 on Monday, posting a staggering 24.5% loss over the last five days. While macroeconomic concerns, including Trump’s trade tariffs and global inflation fears, have weighed on the broader market, Solana has also faced internal bearish catalysts.

The limited price reaction to Trump’s crypto strategic reserve announcement on March 2 and the massive token unlock from the FTX estate since March 1 have significantly increased short-term market supply. This has led to Solana suffering steeper losses than its rivals such as XRP and ETH since the market correction began in mid-February.

With new buyers hesitant to enter during the FTX unlock period, Solana was left vulnerable to major downside risks.

This became evident when U.S. Non-Farm Payroll (NFP) data on Friday triggered another round of sell-offs.

As a result, Solana has been on a consistent losing streak since March 5, with prices plunging 24.5% over five consecutive days. At press time, SOL was trading around $115.

SOL short traders deploy $730M leverage, breaking two critical support levels in 24 hours

Solana’s underwhelming price performance in the spot markets aligns with the impact of the FTX unlocks, forming a dual bearish catalyst alongside inflation-driven macroeconomic pressures.

However, derivatives market trends indicate that SOL’s sharp Monday losses, outpacing ETH and XRP, may be largely attributed to aggressive short traders capitalizing on cautious investor sentiment.

Coinglass liquidation data tracks the total leverage deployed in active SOL perpetual futures contracts, revealing significant short interest at key price levels.

Over the past seven days, short traders have deployed over $732 million in leverage, significantly outpacing the $93.6 million in active long positions.

This disparity underlines a decisive shift in market sentiment, with long traders opting to close their positions en masse in response to the dual bearish catalysts.

The data also highlights that SOL traders surrendered over $174 million in long contracts as the price broke below the critical $125 and $120 support levels over the weekend.

This wave of liquidations weakened buying support, accelerating the drop to a seven-month low near $115 on Monday.

Without a meaningful resurgence in demand, SOL now appears poised to slip further toward $99 before encountering the next significant support cluster. 

Solana price forecast: SOL risks deeper plunge as bears tighten grip below $120

Solana price is leaning bearish, with technical indicators reinforcing the downside pressure as SOL slides below key support levels.

The daily chart shows SOL trading at $119.64, down 24.4% in four days, marking its worst decline in months. Bollinger Bands are expanding downward, with SOL’s price action firmly pinned beneath the midline at $149.13, signaling continued weakness. 

The lower band at $116.20 now serves as immediate support, but the steep descent suggests further losses if buyers fail to reclaim lost ground.

Adding to the bearish momentum, the RSI hovers at 32.66, skirting oversold conditions but still lacking a definitive reversal signal. Notably, RSI's downward trajectory suggests sustained selling pressure, particularly as it remains below the signal line at 35.91. This confluence of indicators aligns with the broader sell-off triggered by recent macroeconomic events and Solana’s own supply-driven headwinds.

Bearish leverage remains a critical factor, with $730 million in short positions exerting additional downward force on SOL. If selling pressure persists, SOL could break below $116.20, setting up a deeper plunge toward $99. Conversely, any recovery hinges on bulls reclaiming $125, invalidating the breakdown and reintroducing the possibility of a short squeeze targeting $149.13.