Solana’s Dramatic Rebound: What’s Driving the Market?

Solana (SOL) recently experienced a sharp rebound following a severe price drop. Ali Martinez, a prominent crypto enthusiast, noted that the Solana rebound was wild. He previously mentioned that Solana seemed to form a “W” pattern on lower time frames, predicting a potential rise to $142 if it sustained above $125. The prediction proved accurate as SOL surged to around $142.02, marking a 15.37% increase within the last 24 hours.

According to experts, whales pushed SOL’s price down to manipulate the market. This caused panic among novice investors, forcing many to sell their holdings at lower prices. As a result, whales repurchased SOL at bargain prices. SOL dropped over 20%, falling below the critical support level of $121, but then it rebounded sharply.

During the downturn, Solana’s trading volume surged by over 245%, indicating heightened activity among traders. Despite the drop, analysts noted a potential for a rebound if SOL closed above certain levels. If SOL closed a daily candle below $122, it could drop to $77. However, closing above $122 might lead to a reversal toward $155.

A former Coinbase angel investor highlighted on X (previously Twitter) that whales were behind the price manipulation. He noted that whales drove down SOL’s price to induce panic selling among new investors. This strategy enabled whales to buy back at lower prices, ultimately profiting from the volatility.

In the past 24 hours, Solana traders liquidated nearly $65 million in positions. Of this, $47.16 million came from long positions and $18.28 million from short positions. This liquidation further indicates the market’s turbulence and the strategic maneuvers by large investors.

Technical analysis revealed that SOL was trading below the 200 Exponential Moving Average (EMA) on a daily timeframe, indicating bearish trends. However, the Relative Strength Index (RSI) showed oversold conditions, hinting at a potential price reversal. As of press time, SOL is trading at around $138, marking a surge of 20%.

The market’s future movements depend on SOL’s ability to sustain its current levels and investor sentiment. As the situation unfolds, traders and investors must stay vigilant and watch for further signals that might indicate the market’s direction.