Solana Drops 40% in a Month as Whales Open Aggressive Long Positions

Solana has suffered a sharp correction in recent weeks, falling nearly 40% over the past month and more than 54% since its January peak. The broader trend remains clearly bearish, and most derivatives traders continue positioning for further downside. Yet beneath the surface, a different narrative is quietly emerging.

While retail sentiment leans negative, several whales have begun opening aggressive long positions. This divergence between price action and large-holder behavior has created a critical inflection point for Solana. The key question now is what these experienced players are seeing that the broader market may be missing.

Early Reversal Signals Begin to Form

Technically, Solana’s chart is still in a downtrend, but momentum indicators suggest early signs of potential exhaustion. Since November 21, price has continued printing lower lows. However, the Relative Strength Index (RSI) has formed a higher low during the same period. This bullish divergence often signals that selling pressure is weakening, even if price has not yet reversed.

The setup, however, remains unconfirmed. For the structure to hold, Solana must maintain support above $77, which represents the low of the latest daily candle. A close below that level would invalidate the short-term stabilization attempt. Equally important, RSI must remain above the 30 level. A breakdown below 30 would confirm continued weakness and erase the bullish divergence.

As long as those two conditions remain intact, early reversal potential stays alive. This may explain why at least one whale recently deposited $2 million in USDC to open a 20× leveraged long position despite the prevailing downtrend.

Meanwhile, derivatives data shows broader traders remain skeptical. Open interest rose from $1.93 billion to $1.98 billion, suggesting increased positioning. At the same time, funding rates dropped deeper into negative territory, falling from -0.005% to -0.032%. This sharp shift indicates traders are heavily betting on further downside, creating a crowded short environment.

Long-Term Holders and Institutional Signals Show Accumulation

On-chain data adds another layer to the story. Long-term holder accumulation has increased significantly. The Hodler Net Position Change metric shows net buying jumped from 786,539 SOL to 972,417 SOL in just one day, marking a 23.6% increase. This suggests experienced investors are accumulating during weakness rather than exiting.

Capital flow indicators also point to improving conditions. The Chaikin Money Flow (CMF), which measures buying and selling pressure based on price and volume, has started rising even as price remains suppressed. This suggests quiet capital inflows are beginning. However, for this to translate into sustained upside, CMF must break above both its ascending trendline and the zero line.

The weekly Volume Weighted Average Price (VWAP), often viewed as a proxy for institutional positioning, adds further context. Solana recently reclaimed this level briefly, producing a 10% bounce. A similar reclaim in early January led to a nearly 20% rally. Currently, VWAP sits just above $79, close to the present trading range. Historically, VWAP reclaim has preceded CMF strength, hinting that institutional-style accumulation could be building again.

Short-Term Holders Pose Immediate Risk

Despite these constructive signals, short-term holders remain a significant threat to recovery. HODL Waves data shows the share of supply held for one week to one month increased from 5.10% to 7.18%, a 40% rise. This cohort is more reactive to volatility and more likely to sell into rebounds, creating resistance during recovery attempts.

Solana now sits at a decisive level. If price holds above $77 and RSI remains above 30, the bullish divergence remains valid, opening the door for a potential recovery toward $91 — roughly 15% upside from current levels. However, a break below $77 combined with RSI losing 30 would invalidate the setup and expose downside toward $68, and possibly $54, representing more than 30% additional decline.

The broader market continues betting against Solana, as shown by deeply negative funding rates and rising short exposure. Yet whales and long-term holders appear to be positioning early for a different outcome. The next few daily candles — and whether RSI holds above 30 — will likely determine which side of the market is proven correct.