The Solana network has faced a confluence of challenging events this week, testing investor resolve. A sharp market correction, significant institutional changes, and conflicting capital market signals have all contributed to a climate of nervous uncertainty. While the price attempts to stabilize, confidence appears shaken. What is driving these extreme fluctuations, and which metrics might signal a genuine recovery over further panic?

Divergent Market Signals Highlight Tension

The current landscape presents a clear split between selling pressure and underlying demand:

• Corporate Balance Sheet Pain: Publicly traded companies holding SOL have reported substantial paper losses. The article cites Forward Industries and the “Solana Company,” whose shares plummeted between 64% and 65% over a 30-day period, mirroring the steep decline in SOL’s spot price during the same timeframe.
• Spot ETF Inflows: In a contrasting development, Solana spot ETFs recorded net inflows of $2.82 million on February 5. This suggests that while leveraged traders were forced to sell, buyers were accumulating the asset opportunistically through exchange-traded products.

This tug-of-war is reflected in the price. Solana is currently trading at $78.50, marking a 52-week low. On Friday alone, it recorded a daily loss of -14.94%.

Liquidations Fuel the Downturn

The recent volatility was ignited by a broad cryptocurrency market correction, with Solana at its epicenter. A sharp price drop on Friday triggered the forced closure of a large volume of leveraged long positions. Data indicates this sparked a liquidation cascade, with over $300 million in longs being unwound within 24 hours. Such forced sales often exacerbate downward momentum, as positions are closed automatically rather than by voluntary investor decision.

Despite a subsequent partial rebound, market sentiment remains fragile. The Crypto Fear & Greed Index is reportedly signaling “Extreme Fear,” a clear indicator that psychological recovery has not yet taken hold.

Should investors sell immediately? Or is it worth buying Solana?

Institutional Shifts Add to Uncertainty

Further unease within the Solana community stemmed from a restructuring at Multicoin Capital, a key institutional investor with deep ties to SOL. On February 5, co-founder Kyle Samani stepped down from his day-to-day executive role, though he remains Chairman.

Simultaneously, on-chain observers noted significant transfers. Approximately 440,000 JITOSOL (valued in the report at around $47 million) moved to liquidity providers FalconX and Galaxy Digital. While such movements can be part of routine portfolio management, their proximity to the leadership change amplified questions about how major players might manage their holdings going forward.

Outlook: A Critical Resistance Level

Looking ahead, analysts are monitoring a key technical threshold. The source material identifies a crucial resistance level at $88. A sustained break above this point could signal stronger recovery momentum. Failure to reclaim it, however, raises the risk of retesting recent lows. Holding above this zone would be viewed as a positive sign that the liquidation-driven selling pressure has been absorbed.

In terms of longer-term projections, Standard Chartered has reportedly adjusted its price target. The bank has lowered its 2026 forecast from $310 to $250 but maintains a bullish outlook for the end of the decade, citing a potential target of $2,000 by 2030. This ambitious projection is explicitly contingent on further adoption of the Solana network within the financial sector.

Ad

Solana Stock: Buy or Sell?! New Solana Analysis from February 7 delivers the answer:

The latest Solana figures speak for themselves: Urgent action needed for Solana investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 7.

Solana: Buy or sell? Read more here...