Solana’s short-term price targets – Is a drop to $130 next?

• Solana’s expected inclusion in the Strategic Reserve has reinforced investor confidence and capital inflows
• Is a breakout on the horizon for the altcoin?

In a single strong impulse move, Solana [SOL] reclaimed $180 on the charts, surging by 24.40% in a day to recover losses from the last ten sessions. In fact, analysts even projected the next key resistance to be near $213.

This bullish momentum was supported by Trump’s endorsement of Solana’s inclusion in the Strategic Reserve. 

It was accompanied by a 480% spike in volume to $14 billion – A sign of strong buying pressure which reinforced the “potential” for more upside.

Unfortunately for SOL investors, this upside wasn’t to last.

Can a breakout be confirmed?

Solana saw the sharpest retracement among high-cap assets, dipping below its pre-election levels. A key demand zone formed at $130, triggering a strong recovery. The altcoin surged by 46% in under a week, reclaiming $180 as buying pressure intensified.

However, the rally is now facing headwinds. At press time, SOL was down almost 20% again, with a value of just under $140. Its declining volume hinted at weakening bullish momentum. 

Sell-side pressure increased as traders locked in profits too, while uncertainty over altcoin inclusion in the reserves fueled market hesitation. 

From a technical standpoint, Solana’s inability to establish a solid support base on the 1D chart raises concerns about the sustainability of its uptrend.

To confirm a breakout beyond $200, SOL must reclaim $180 again and establish higher lows. However, slipping below $170 has shifted the short-term outlook, increasing the probability of a deeper retracement.

Solana’s short-term price structure under focus

Needless to say, Solana’s failure to hold $180 has put bulls under pressure. 

Despite prior upside momentum, spot accumulation has remained weak, with exchange inflows significantly outpacing outflows – A bearish signal indicating hike in sell-side activity.

Solana’s dip below $180 aligned with $195.28 million in net inflows – The largest since January.

The last comparable spike occurred when SOL hit its all-time high of $295, accompanied by $384.79 million in deposits, which preceded a sharp reversal.

Source: Coinglass

However, derivatives traders might be doubling down. Open Interest (OI), for instance, jumped by 15.80% to $5.05 billion, indicating growing speculative activity. 

Over $1 billion in fresh positions have been opened, largely driven by pro-Solana sentiment. However, spot accumulation remains weak, signaling a widening gap between speculation and actual demand.

This imbalance poses a risk of liquidation cascades in the coming days. A deeper retracement could be on the horizon, with Solana potentially revisiting its lower support level at $130 before any confirmed breakout.