The Solana (SOL) price is at $79.90 on April 7, just above the zone where a confirmed breakout would trigger a decline of nearly 20%.
On the daily chart, you can see a head-and-shoulder pattern where the neckline is quickly approaching. What makes this situation even more urgent is that both the spot market and the derivatives market have turned bearish on the same day. Therefore, the opposing effect that previous dips often absorbed is now missing.
Spot sales are changing as the right shoulder forms.
The daily chart shows that the Solana price is moving in a head-and-shoulder pattern. The head reached a high of $97.80, while the right shoulder is at $83.11. The neckline runs below $75.62. A confirmed breakout below this zone activates an expected decline of about 20%.
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The on-chain data shows why this pattern is now more dangerous than when it started to form. The Exchange Net Position Change - this metric tracks the 30-day net inflow or outflow of SOL on exchanges - has turned strongly.
On March 31, this metric stood at -851.371 SOL, which means holders withdrew many tokens from exchanges. This indicated accumulation and a smaller supply to sell. On April 6, this turned to +1.180.864 SOL, a difference of over 2 million tokens in less than a week. Holders are now sending SOL back to exchanges, increasing the selling supply just as the neckline of the head-and-shoulder pattern approaches.
This change from spot accumulation to distribution aligns with the formation of the right shoulder and the price moving down towards the neckline. The derivatives market shows whether leveraged traders share the same bearish view.
Derivatives are bearish but offer little squeeze potential.
The funding rate for Solana perpetual contracts has become further negative over the past sessions. On April 7, the total funding rate was about -0.02%, approximately twice as negative as earlier in the day. With a negative funding rate, short positions pay longs, indicating that the market is bearish.
The open interest has also slightly increased, from $1.91 billion to $1.94 billion. New positions are being opened, and the direction of the funding rate confirms that these are mainly short positions.
However, the increase in open interest is limited. An increase of $30 million is not the kind of aggressive short buildup that typically leads to a short squeeze.
Leverage usage is increasing, but it is not yet high enough that a sudden price rise would lead to significant liquidations. This is important because it means that the derivatives market confirms the bearish stance without much fuel for an unexpected rise. Both the spot and derivatives markets are moving in the same direction, making a test of the neckline more likely.
Solana price levels between holding and a 20% decline.
The Solana price must stay above $78.14 to protect the remaining long positions. A drop below $78 would liquidate these longs, potentially leading to additional sales on the exchange and causing the price to quickly drop towards the neckline.
The neckline is between $75.62 and $75.07 at the 0.382 level. A daily closing price below $75.07 would confirm the head-and-shoulder breakout and activate a decline of 19%. This gives a price target of $62.08, with $60.56 as the last major support level. A move below $60 would bring the Solana price to its lowest point since early 2025.
On the upside: if Solana manages to close above $83.11 again, the right shoulder disappears and the pattern weakens. A daily closing price above $83.11 shows that the selling pressure and bear positioning are not strong enough to force the breakout. Then the short-term changes from bearish to neutral.
A daily closing price below $75.07 confirms the 20% decline targeting $62, while reclaiming $83.11 weakens the pattern and removes the immediate downside risk.