Solana is giving its first signs of stabilization after a severe market crash. In the last seven days, SOL has lost approximately 15.5% of its value. The overall wave of selling between January 31 and February 1 accelerated the decline further.
At its lowest point, the price of Solana dropped to 95.87 dollars, finding support there. Since that day, the price of Solana has recovered nearly 8%, currently trading around 103.15 dollars.
This recovery has erased most of the daily losses. More importantly, this response is supported by improvements in capital inflows and the patient behavior of long-term investors. These signals indicate that strong buyers have entered the market. However, risks are still on the table. Now, for this recovery to turn into a lasting upward trend, one critical level stands out: 120 dollars.
Breakdown Target Achieved: Big Money in Play at Support Level
The recent drop in Solana came with a clear technical formation. On the daily chart, the SOL price showed a breakout after completing the head and shoulders formation at the end of January. This formation's target area indicated a range of $95-96.
This target was tested almost exactly at $95.87.
After the price dropped to this level, selling pressure decreased and buyers stepped in. We can see this change in the Chaikin Money Flow (CMF) indicator. The CMF measures whether capital is entering an asset using price and volume data. When the CMF rises, it indicates that large investors are buying.
Between January 27 and February 3, while the SOL price was in a downtrend, the CMF rose. This movement is known as bullish divergence. In other words, even while the price weakened, the inflow of money into the market continued.
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In such sharp corrections, the CMF usually falls in parallel with the price. The rising CMF here indicates that whales or perhaps institutional investors find the $95-96 range attractive.
Currently, the CMF is approaching the zero line. If it breaks upward, it will confirm that buyer pressure has surpassed sellers in the market. This would strengthen the recovery. So far, the incoming data shows that Solana's support around $96 is not coincidental: it seems to be defended by large capital.
Long-Term Holders are Patient: Short-Term Risk is Increasing
Strong recoveries are usually supported by long-term investors. On the Solana side, this support can be clearly seen in liveliness data.
Liveliness measures how frequently long-held coins are spent. When liveliness increases, it indicates that long-term investors are selling. When it decreases, it shows that they continue to hold.
In the last month, Solana's liveliness ratio has been trending downward.
Even during the sharp drop from $127 to below $100, liveliness did not increase significantly. There was only a short-term increase around January 29-30, after which it continued to decline again. This shows that long-term investors did not panic sell and remained stable and patient.
This behavior indicates that the recent drop is perceived as temporary, not permanent. However, not all investor groups agree.
HODL Waves show how long different groups of investors have held their coins and provide clues about which groups are buying or selling. According to recent data, the group that held for 1 day-1 week between December 31 and February 1 increased their share from 4.38% to 5.26%.
This group represents short-term and speculative traders.
They generally buy during downturns and sell during short recoveries. The increase in these investors raises both volatility and the risk of rapid sell-offs.
So while long-term investors show stability, short-term traders are becoming increasingly active in the market. This structure supports short-term reactions but for a lasting rise, either the CMF or institutional demand needs to jump sharply above the zero line.
Critical Levels in Solana Price: Why is $120 the Main Test?
During this period, the price levels of Solana, which gained momentum but also carried risks, are gaining more importance than indicators.
The first important support is still in the $95.87–$96.88 range. This area stands out as a target after the breakout. As long as SOL stays above this area, the recovery structure is preserved. However, if this support is lost, there is a risk down to $77, and the bullish scenarios in the market will largely become invalid.
In upward movements, the first short-term resistance is around $103.60. Currently, Solana is testing this area. A daily close above this level provides a signal of strengthening in the short term.
However, the most critical level is $120.88. There are three important reasons for this level.
First of all, this level marks the main breakout point formed from January 29. It also aligns almost perfectly with the 20-day exponential moving average (EMA). The EMA acts as a dynamic resistance during declines while tracking recent price trends.
Thirdly, when Solana regained this area at the beginning of January, it experienced a 17% increase. A daily close above $120.88 could shift momentum back in favor of buyers and indicate the end of the corrective phase.
Above $120.88, the next resistance to be encountered in the Solana price is at $128.29. If this level is surpassed, it could open the door to a short-term upward movement towards $148.63.
Still, this positive picture depends on the continuation of capital inflows and the persistence of long-term holding behavior. If short-term traders dominate the volume, the rise may end before reaching these targets.