A Galaxy-linked wallet moved 200,000 Solana [SOL] to Binance, OKX, and Bybit, which equals roughly $16 million in fresh exchange supply.
At the same time, daily spot netflow flipped positive by $1.95 million, as per CoinGlass analytics. This shift interrupts months of predominantly negative flows.
When coins move onto exchanges, traders anticipate potential distribution. Some reduce exposure immediately. Others position for volatility expansion.
Since timing aligns with price hovering near structural support, the reaction becomes even more critical. If sellers lean into this new liquidity, downside pressure could intensify quickly.
However, if buyers absorb the added supply aggressively, the market may treat this transfer as fuel for a short-term rebound instead of a breakdown trigger.
Can Solana escape its descending channel?
SOL continues to trend inside a well-defined descending channel on the daily chart. Price recently lost the $89.75 level and now trades near $80.09. The broader demand region stretches between $78.07 and $89.75.
Above current levels, $119.41 stands as the next major resistance. Higher still, $147.28 marks the previous structural supply. Each rally attempt since November has stalled beneath channel resistance.
Lower highs continue to form consistently. That pattern reinforces bearish structure. However, the $78 region previously attracted strong buying interest.
If bulls defend this zone decisively, a relief move toward $89 could develop. If sellers break support cleanly, the channel structure may extend losses toward deeper liquidity pockets below.
The daily RSI prints 26.86, while its moving average tracks near 27.92. These readings sit well below the 30 threshold, signaling oversold conditions.
Oversold momentum often invites reflex rallies. However, strong downtrends can suppress RSI for extended periods. If RSI climbs back above 30 and holds, short-term momentum could shift gradually.
Until that happens, downside continuation risk remains active. Traders must watch closely whether momentum expands upward or continues to grind lower under persistent pressure.
Source: TradingView
Why does Solana’s price keep sliding?
Spot Taker CVD over the 90-day window shows clear buyer dominance. Aggressive participants continue to lift offers rather than hit bids.
The behavior signals active absorption across spot markets. However, price continues to print lower highs inside the descending channel.
This divergence creates structural tension. When buyers dominate yet price declines, larger passive sellers may cap rallies quietly.
Additionally, thin liquidity above current levels may prevent sustainable expansion. If CVD sustains its upward trajectory while price stabilizes above $78, accumulation gains credibility.
On the other hand, if price breaks support despite persistent buyer aggression, trapped longs could unwind rapidly, accelerating the next downside impulse.
Source: CryptoQuant
Leverage builds tension above and below
The Binance SOL/USDT liquidation heatmap reveals dense leverage stacked just above current price levels.
Short liquidations cluster in the low-to-mid $80s. Meanwhile, meaningful liquidity rests below the $78 support region.
These clusters act as volatility magnets. Price frequently gravitates toward such zones before establishing direction. Currently, SOL trades near $80, placing it between opposing liquidity pockets.
If buyers push upward into overhead clusters, cascading short liquidations could trigger a sharp squeeze. Conversely, if sellers press below support, long liquidations may spark a swift flush lower.
This compression signals imminent volatility expansion. Traders now monitor which liquidity pool price targets first, as that reaction could dictate the next decisive move.
Source: CoinGlass
To sum up, the $16 million exchange inflow increases tension near a fragile support zone. Structure favors sellers, yet buyers continue absorbing aggressively. RSI signals exhaustion, though not a confirmed reversal.
Liquidation clusters compress volatility tightly between support and overhead leverage. If traders defend demand and squeeze shorts, SOL could stage a sharp relief rally.
However, if exchange liquidity fuels distribution, the descending channel may extend losses decisively. Market reaction now determines SOL’s next directional breakout.
Final Thoughts
- Trader reaction around the $78 support zone now outweighs the initial impact of the $16M exchange inflow.
- Compressed liquidity between overhead shorts and vulnerable longs increases the probability of sharp volatility expansion soon.
Source: https://ambcrypto.com/16m-solana-inflow-sparks-fear-is-a-sol-squeeze-ahead/
