Solana traders alert! – Uncovering the risks beneath the 30% rally

• Solana climbed to $125, but whale exits and dense supply zones near $140 raised the risk of a long squeeze.
• The recent bounce looked more like a temporary relief rally.

Despite Solana’s[SOL] recent recovery to $120, large holders remain deep in the red, which affects the overall market sentiment. 

On-chain data shows a major whale recently liquidated 274,188 SOL at an average price of $108. With an initial cost basis of $148, this capitulation locked in a staggering $11 million in realized losses.

Even with SOL now hovering around $125, marking a 30% bounce from its April 7 low of $95, the whale would still be underwater.

This behavior reflects continued distribution among smart money, as whales use liquidity spikes to exit rather than accumulate. For retail traders, it’s a caution flag amid a fragile macro and on-chain backdrop.

Key supply zone in focus 

The UTXO Realized Price Distribution (URPD) provides a granular breakdown of where Solana coins were last transacted and mapped against price levels. 

For SOL, the data highlights three major supply clusters – around $100, $120, and $140. These concentrations indicate that a significant share of the circulating supply was acquired at these levels. 

Among them, the $140 zone stands out, with over 27.8 million SOL concentrated there, accounting for approximately 4.75% of the total circulating supply.

This cluster represents a key area of resistance, as many holders are either near breakeven or facing unrealized losses.

Source: Glassnode

Therefore, the risk of whale-driven sell-offs remains if SOL fails to reclaim the $140 level. A price move back to this threshold could lead to holders shifting into unrealized profits, potentially triggering a bullish rotation driven by FOMO and market greed.

Additionally, 38 million SOL remain clustered between $117 and $120, making this range a potential hotspot for profit-taking as price breaks this ceiling.

As a result, until the $140 level is tested, price volatility in Solana’s price action is likely to persist.

Futures data reinforces Solana’s market outlook

Solana’s 7.07% daily upswing positions it as the leading top-tier asset in terms of recovery velocity. 

This rally isn’t just spot-driven — Derivatives data confirms aggressive positioning. Open Interest (OI) jumped 13.89% to $5.23 billion, signaling a fresh wave of leveraged exposure entering the market.

At first glance, this appears bullish. However, it also introduces fragility.

The whale distribution was still active, and Short-Term Holders (3–6 months) are still deep in the capitulation zone. Plus, the recent breach of a high-density supply zone ($117–$120) sets the stage for elevated liquidation risk.

Source: TradingView (SOL/USDT)

Should Solana fail to sustain momentum, a cascading long squeeze could trigger sharp downside volatility, particularly as funding rates start skewing positive.

In short, while the recent bounce has sparked optimism, this rally bears hallmarks of a liquidity-driven relief phase—not a confirmed trend reversal.

Until Solana reclaims and holds above the $140 supply zone with conviction, downside risk remains firmly on the table.