Solana Bears Get Squeezed: Why Smart Money Is Circling as Altcoin Capitulation Nears Its Peak

Solana is the market’s favorite punching bag, until it isn’t. After weeks of relentless selling, SOL has found itself teetering near the $80 mark, a level that has become both a psychological graveyard and a magnet for bottom-fishers. The headlines have been brutal: heavy unrealized losses, cascading liquidations, and a market narrative that reads like a eulogy for one of 2021’s hottest assets. Yet, in the shadows, smart money is quietly circling, betting that the pain is overdone and the next move could be a face-ripping squeeze.

Let’s not sugarcoat it. The past month has been a horror show for Solana holders. From its euphoric highs, SOL has cratered, dragging down DeFi TVL, NFT volumes, and just about every metric that once made the Solana ecosystem the darling of crypto Twitter. The latest price action saw SOL briefly dip below $80, triggering a fresh round of margin calls and stop-loss cascades. Yet, as the dust settled, a curious thing happened: buyers stepped in. Not retail, not the meme-chasing crowd, but the kind of deep-pocketed funds that tend to show up when everyone else is puking into the bid.

According to cryptonews.com, market participants are sitting on heavy unrealized losses, but they’re still buying. That’s not retail stubbornness, it’s a calculated bet that the worst is priced in. The derivatives market is flashing a classic short-squeeze setup: funding rates have flipped negative, open interest has collapsed, and the perpetual swap basis is at its lowest since the FTX debacle. In plain English, the shorts are crowded, and the cost to bet against Solana is rising.

This is not just a Solana story. The entire altcoin complex has been battered as Bitcoin’s volatility has sucked the oxygen out of the room. But Solana is the poster child for capitulation. On-chain data shows whale wallets accumulating, with several large addresses adding to positions as SOL tested the $80 level. The last time we saw this kind of behavior was in late 2022, right before Solana ripped higher in a short-covering rally that left bears scrambling for the exits.

The macro backdrop is not exactly friendly. Tech stocks are under pressure, risk appetite is fragile, and liquidity is drying up across both traditional and crypto markets. But that’s precisely why the setup is so compelling. When everyone is on one side of the boat, it doesn’t take much to tip it over. The pain trade is higher, not lower.

The technicals tell the story. SOL has found support at $80, with a series of higher lows forming on the hourly chart. Resistance sits at $92, with a breakout above that level likely to trigger a cascade of short covering. The RSI is deeply oversold, and the MACD is curling higher, a classic mean reversion setup. Volume has spiked on down days, but the selling pressure is waning, suggesting that forced sellers are running out of ammo.

What’s absurd is how quickly the narrative can flip. Two weeks ago, Solana was “dead.” Now, the same analysts who were calling for $50 are whispering about a bottom. The market loves to punish consensus, and right now, the consensus is that Solana is uninvestable. That’s when the biggest moves happen.

Strykr Watch

The levels to watch are obvious. $80 is the line in the sand. A sustained break below opens the door to $65, but as long as SOL holds above, the risk-reward skews to the upside. Resistance at $92 is the first hurdle; a close above could see a quick move to $105 as shorts scramble to cover. The 20-day moving average is rolling over at $98, providing a natural magnet for any rally.

On-chain flows are supportive. Whale accumulation is picking up, and exchange balances are dropping, a sign that coins are moving to cold storage, not exchanges. Funding rates remain negative, but are starting to normalize, suggesting that the forced selling is abating.

For traders, the setup is asymmetric. The downside is limited to the recent lows, while the upside could be explosive if the squeeze materializes. Just don’t chase, wait for confirmation and let the market come to you.

The bear case is that Solana is a broken asset, plagued by technical issues and a shrinking developer base. If $80 fails, the next stop is $65, and the pain could accelerate as margin calls kick in. But the bull case is that everyone who wants to sell has already sold, and the only thing left is to squeeze the shorts until they cry uncle.

The opportunity is to position for a reversal, not a trend. This is a market that rewards nimble traders, not bagholders. Use tight stops, scale in on dips, and don’t overstay your welcome. The first sign of a breakout above $92 is your cue to press the long side, with a stop below $80 to manage risk.

Strykr Take

Solana is the market’s favorite contrarian play. The pain is real, but so is the opportunity. When everyone is bearish, the risk is that the next move is violently higher. This is a setup for traders, not investors. Play the squeeze, but don’t marry the trade.