Solana (SOL) is showing renewed strength as it approaches a key resistance level, with bullish momentum building and market conditions setting the stage for a potential short squeeze. As traders line up short positions above $170, the price is creeping closer to a crucial decision point that could trigger a wave of liquidations—and possibly send SOL sharply higher.

At the time of writing, Solana was trading around $171.47, reflecting a 2.14% gain over the previous 24 hours. This marks a strong rebound from earlier pullbacks and puts the cryptocurrency in a critical technical position just below the $176–$188 resistance band, which has proven difficult to break in the past.

Shorts Under Pressure Near Key Resistance

Market data shows that a significant number of short positions have been established in the $170 to $176 range. These are highly leveraged bets that Solana will fail to push higher, but they may become a liability for bears if momentum continues to favor bulls.

According to liquidation heatmaps, the area between $170 and $176 is loaded with overleveraged short trades. If Solana manages to move convincingly above this range, it could trigger automatic liquidations of these positions. That in turn would fuel additional upward movement—a phenomenon known as a short squeeze.

On May 18, over $1.72 million in short positions were liquidated, while long liquidations remained minimal. This imbalance is a classic sign of vulnerability among bearish traders. If bullish momentum continues, the risk of another cascade of liquidations looms large.

Funding Rates Turn Positive, Signaling Sentiment Shift

Adding fuel to the bullish case is a shift in derivatives market sentiment. For the first time in weeks, Solana’s funding rate on Binance flipped into positive territory, clocking in at 0.008%. While the number itself is still relatively low, the change marks a notable sentiment reversal among traders.

Positive funding rates mean that long positions are paying to hold, indicating growing confidence that prices will rise. This trend often leads to increased long interest, which can further reinforce upward price action, especially in a market poised near major resistance.

Retail Interest Returns as Social Buzz Grows

Momentum is not limited to trading data alone. Solana is also regaining attention in the broader crypto community. Its Social Dominance—a metric that measures how much a coin is mentioned in the crypto social sphere—has climbed back to 5.18%.

This rise suggests that retail traders and community members are starting to pay closer attention once again. Although still below the peak levels seen in March, the renewed buzz often acts as a leading indicator of further market engagement and potential inflows.

Historically, social media traction tends to spike when a coin begins making strong upward moves, acting as both a consequence and driver of momentum.

Technical Indicators Suggest Bullish Continuation

From a technical analysis standpoint, Solana appears well-positioned. The price has held above the 1.618 Fibonacci extension level at $163.16, a key support zone that has survived multiple recent tests.

Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is showing early signs of a bullish crossover near the neutral line. This suggests that price momentum could soon tilt decisively in favor of the bulls.

Should SOL break above the $176 resistance, Fibonacci extension levels point to future targets around $189.88 and $198.13, giving traders a roadmap for what may come next.

Solid Development Supports Fundamental Strength

Beyond price and hype, Solana’s fundamentals remain robust. Development activity on the network holds steady at a reading of 23.38. While slightly below previous highs, this level signals consistent work by developers and ongoing progress on the network.

Stable development metrics are often overlooked but are crucial for long-term confidence. They provide assurance that Solana is not just riding market waves but continues to evolve and improve its infrastructure.

Is a Breakout Imminent?

All key metrics—rising funding rates, retail interest, technical indicators, and solid fundamentals—are aligning to suggest Solana could be on the verge of a significant breakout. The immediate challenge remains the resistance range between $176 and $188, a zone that has repeatedly capped upward momentum.

If bulls can clear this hurdle, they may not only trigger short liquidations but also unleash a stronger, sustained rally toward higher price targets.

With shorts piling up and bullish pressure building, the next few days could be decisive for Solana’s near-term trajectory.