Will Solana Break $90?... Will a Short Squeeze Lead to a Real Rally?

▲ Solana (SOL)/AI generated image ©

Solana (SOL) is aiming to re-break the $90 resistance line, backed by a short squeeze and a large inflow of stablecoin liquidity.

According to cryptocurrency market data aggregator CoinMarketCap on May 6 (local time), Solana traded at $89.06, up 2.82% in the last 24 hours. While Bitcoin (BTC) and the overall cryptocurrency market remained flat during the same period, SOL showed a relatively strong performance.

The most direct upward driver was a short squeeze (buying pressure generated to liquidate or cover short positions). As the SOL price approached $90, over $17 million in short positions were liquidated in the last 24 hours, leading to forced buying and increased upward pressure. However, it is noted that as derivative positions fueled the rise, the risk of increased volatility also remains.

Signs of institutional liquidity inflow also stimulated investor sentiment. Circle recently issued approximately $750 million worth of USD Coin (USDC) on the Solana blockchain within the last 24 hours. The media reported that this move could be interpreted as a positive signal for Solana-based stablecoin payment demand and on-chain liquidity.

Technically, $90 is considered a key short-term resistance level. The 7-day Relative Strength Index (RSI) is 64.43, showing upward momentum but not yet entering the overbought zone. The main support zone is suggested to be $85-$87, and if this zone is maintained, the possibility of retesting $90 increases. Conversely, if it falls below $87, long positions could be liquidated, and there is a risk of a decline to the $80 support level.

Experts believe that whether SOL stably breaks $90 with accompanying trading volume will be key to determining its next direction. If open interest further increases with price appreciation, it could be interpreted as a continuation of the short squeeze, but if buying pressure weakens around $90, the possibility of a short-term pullback could also increase.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*