Solana price analysis: SOL tries to regain lost ground after 45% sell-off

​​​Solana tries to regain lost ground

​Over the past few weeks, Solana (SOL) has been the centre of intense selling pressure, a dramatic shift from the tentative stabilisation many traders hoped would continue through early 2026.

​What began as a pullback quickly evolved into a pronounced sell-off that exposed persistent vulnerabilities in Solana’s price structure, reaffirming how susceptible high-beta crypto assets can be when sentiment sours and leverage unwinds accelerate.

​At the beginning of the year Solana made an attempt to reclaim lost ground from late 2025. Prices rose back towards the $150 region, with sentiment supported by occasional inflows into Solana-linked investment products, continued developer activity on the network and narratives around its high throughput and low transaction costs. However, this apparent stability masked fragilities beneath the surface - particularly growing long exposure in derivatives markets and thin liquidity relative to Bitcoin and Ether.

​The catalyst for the recent sharp downturn was a renewed risk-off rotation across global cryptocurrencies. Investors recalibrated expectations around rate cuts and growth, prompting a broad retreat from speculative positions.

​Cryptocurrencies, especially those outside the top two in market cap, were among the first to feel the impact. Solana, known for its higher beta relative to Bitcoin and Ether, declined more sharply - by around 45% from its January peak - as traders reduced exposure in favour of safer, more liquid assets.

​Leverage dynamics significantly amplified the sell-off. In the days leading up to the decline, derivatives data showed a buildup of long positions in SOL futures and perpetual swaps, with traders anticipating a breakout as Solana tested resistance levels.

​When prices instead failed to sustain gains and broke key short-term supports, a cascade of stop-loss orders was triggered. Funding rates quickly deteriorated, making long positions more expensive to maintain, and liquidations gathered pace. As leveraged longs were unwound en masse, the selling pressure far exceeded what spot-market demand could absorb, driving SOL sharply lower in a feedback loop of accelerating declines.

​Institutional flows reflected the shift in sentiment. Earlier in the year, structured products and discussions about potential Solana exposure vehicles had suggested thoughtful institutional interest in the asset. Over the last few weeks, however, those flows turned more cautious. Rather than acting as stabilising forces during the downturn, larger allocators pulled back, reinforcing volatility rather than mitigating it.

​Sentiment specific to Solana’s ecosystem also played a role. Although the network’s fundamentals - such as decentralised exchange activity, developer engagement and non-fungible token (NFT) ecosystem growth - remain competitive relative to many layer-1 alternatives, recent on-chain metrics showed declines in speculative trading volume and user engagement.

​For a blockchain that has built much of its reputation on throughput and vibrant application layers, this divergence between structural activity and price performance contributed to a more cautious short-term tone.

​Compounding these pressures were broader narratives around competition among smart-contract platforms. Rivals touting faster or cheaper solutions heightened focus on relative positioning, and in a risk-off environment, narratives that once spurred speculative interest turned into points of scepticism.

​Traders reduced exposure to assets perceived as less defensible in downturns, and Solana’s recent performance highlighted how narratives that support long-term conviction can struggle to counteract macro and technical forces in the short run.

​Despite the intensity of the sell-off, there are signs that the move was driven more by market mechanics and sentiment than by a collapse in underlying fundamentals. Long-term holders have not capitulated en masse, and developer activity continues to show resilience relative to many competing ecosystems. This suggests that, structurally, Solana’s utility story remains intact even as price action reflects near-term pressures.

​Looking ahead, Solana’s trajectory will likely depend on whether macro risk sentiment stabilises and whether broader crypto liquidity conditions improve. If risk appetite returns and liquidation dynamics subside, SOL could find firmer footing and potentially rebuild momentum. Conversely, renewed stress in traditional markets or further unwinding of leveraged positions could prolong the downturn, particularly if speculative flows do not return.

​For now, Solana’s recent sharp sell-off underscores the interplay between leverage dynamics and narrative strength - even for ecosystems with compelling fundamentals.

​Solana bullish scenario:

​While Wednesday's low at $78.05 holds, a recovery towards the recent highs at $88.61 - $89.65 may be on the cards. If overcome, the late January low at $96.94 may be reached as well.

​Solana bearish scenario:

​As long as SOL remains below the $88.61 - $89.65 resistance area, downside pressure is expected to retain the upper hand. A slip through this week's low at $78.05 may lead to the $75.00 region being revisited. Below it lies the early February low at $67.70.

​​Short-term outlook:

Bullish while above this week's $78.05 low, targeting the $88.61 - $89.65 resistance zone.

​​Medium-term outlook:

Neutral with a bearish bias while below $88.61 - $89.65 but above $67.70.

Solana daily candlestick chart