While Solana (SOL)’s recent price movement shows signs of resilience, the overall crypto market remains volatile.
Despite attempts at recovery, the token is facing selling pressure from medium-term holders, casting doubt on its short-term strength. Still, technical patterns suggest that Solana could be headed for another rally if momentum gathers.
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HODL Waves’ on-chain data reveals an interesting trend among Solana investors. Medium-term holders, who have held SOL for 3-6 months, are steadily reducing their holdings. The group’s supply declined by 1.7% in October alone, suggesting investors are selling tokens amid uncertainty.
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Additionally, the supply for 6-12 month holders has not increased, confirming that the coin is being sold rather than matured. This pattern indicates growing skepticism and could put selling pressure on SOL’s price.
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The HODL Cave metric reveals the motivation behind this sales trend. In contrast to profit-taking behavior, data suggests that these investors are driven by fear rather than greed. Median returns for 3- to 6-month holders are between 1.14x and 1.4x, a slight increase that suggests panic selling rather than strategic exit.
Many investors seem to want to secure small profits or minimize potential losses as prices fluctuate. This behavior typically surfaces during times of market uncertainty. If this cautious sentiment continues, it could limit Solana’s upside potential in the short term.
SOL price needs rebound
At the time of writing, Solana’s price is at $184, above the key support at $183. The altcoin appears to be forming a flag pattern, which is a technical setup often associated with a bullish breakout. However, confirmation will depend on volume strength and investor conviction.
After the recent crash, SOL briefly deviated from this pattern before testing and validating it again. For a clear breakout, Solana will need to bounce off the lower trendline or rise above $192. If the buying pressure cannot be sustained, the token could fall below $175 and drop to $163, invalidating the bullish pattern.
Conversely, if Solana breaks through $192, it could push it above $200, an important psychological barrier. A break out of this pattern could generate new momentum and lead to a surge towards $250. Nevertheless, given the current market vulnerabilities, investors and traders should proceed with caution.
