Solana's Rally is a Trap, Holders Are Selling

• Long-term Solana holders are actively selling, with their supply share dropping from 19.28% to 17.24%, signaling a deep lack of trust in the recent price rebound.
• Significant technical resistance is mounting, with a potential bearish EMA crossover and a massive supply wall of over 33 million SOL sitting between $140 and $142.
• A daily close above the $143 mark is critical for any hope of recovery; failure to achieve this could see the Solana price fall back towards the $128 support level.
• Despite a minor daily gain, SOL has plummeted nearly 22% over the past month, and the underlying data suggests the bounce may be a short-lived trap.

Despite a 4.2% jump in its daily price, Solana (SOL) is flashing serious warning signs that have seasoned investors concerned. The bigger picture reveals a token struggling with a nearly 22% drop over the last month, and crucial on-chain data shows that long-term holders are not convinced by the latest rebound, actively reducing their positions instead.

Long-Term Holders Show No Faith

A key indicator of market sentiment, the behavior of long-term holders, paints a bearish picture for Solana. On-chain data, tracked by HODL Waves, reveals that the cohort holding SOL for one to two years has been consistently selling off their assets. Their share of the total supply has fallen from 19.28% on October 20 to just 17.24% by November 19.

This steady reduction from a group that typically holds firm during market corrections is a significant red flag. It indicates that these experienced investors do not believe the recent price bounce is the start of a genuine trend reversal. If they anticipated a true recovery, they would be accumulating or at least holding their positions, not selling into minor strength. This cautious stance directly undermines any bullish narrative for a Solana price reversal.

Technical Hurdles Block Recovery

Adding to the on-chain weakness, Solana's price chart is fraught with technical obstacles that could halt the fledgling recovery in its tracks.

A Bearish Crossover Looms

The technical setup on the daily chart is increasingly concerning. The 100-day exponential moving average (EMA) is dangerously close to crossing below the 200-day EMA. This "death cross" pattern is a classic bearish signal that often precedes further price declines. Similar bearish crossovers in the past, such as the 50-day EMA dropping below the 100-day, have led to fresh downward moves for SOL.

The $142 Resistance Wall

Compounding the issue is a formidable wall of supply sitting directly above the current price. A Cost-Basis Heatmap shows two dense clusters of SOL were last purchased between $140 and $142. The first zone holds approximately 16.3 million SOL, while the second contains around 16.9 million SOL.

These areas represent significant psychological resistance. Investors who bought at these levels are often eager to sell as the price returns to their entry point to break even, creating intense selling pressure that stifles upward momentum.

All Eyes on These Solana Price Levels

For Solana to prove the doubters wrong, it must achieve a decisive daily close above $143. This would push it past the immediate supply clusters and could open the door for a move toward higher resistance levels at $146 and then $167.

However, if it fails to break and hold above $143, the current bounce is likely to fizzle out. Such a failure would confirm the underlying weakness suggested by selling holders and bearish technicals, putting the $128 support level back in play as the next downside target. Given the current evidence, long-term holders are remaining wisely cautious.