Solana (SOL) made headlines recently when it surged 24.4% in a single day, reclaiming the $180 mark after a strong impulse move. This rally was driven by the declaration of its potential inclusion in the U.S. Strategic Crypto Reserve, an event that injected fresh optimism into the market. However, the bullish momentum was short-lived, and the altcoin has since faced challenges, prompting concerns about its short-term price direction.

Rally Driven by News, But Short-Lived

The boost in Solana’s price came after U.S. President Donald Trump’s endorsement of Solana’s inclusion in the U.S. Strategic Reserve. This development, coupled with a massive 480% surge in trading volume, fueled an initial wave of buying, with some analysts even predicting the next key resistance could be as high as $213.

However, the excitement was not sustainable. Solana’s price retraced quickly, losing nearly 20% of its value after the initial rally. As of now, the price is hovering just below $140, with declining volume and increasing sell-side pressure. While the altcoin was buoyed by positive sentiment following the news, the lack of consistent buying momentum has raised doubts about its ability to maintain upward momentum in the near term.

Key Support Levels to Watch

Solana’s price has recently formed a significant support zone around the $130 level, which has historically seen strong demand, leading to price rebounds. However, the altcoin’s inability to hold above $180 signals that the bulls are struggling to establish a solid foundation for a prolonged rally. If Solana fails to recover to and maintain the $180 level, it could face a deeper pullback.

In the event of a further decline, the next major support levels to watch are at $145 and $155. These areas will be crucial in determining whether the current downtrend will continue or if the market will find the strength to stage another recovery.

Weak Spot Accumulation and Rising Sell-Side Pressure

Despite the earlier rally, Solana’s spot accumulation has remained weak, as highlighted by a noticeable increase in exchange inflows. This suggests that traders have been taking profits, which in turn has increased the sell-side pressure. A significant net inflow of $195 million was recorded as Solana dipped below $180, marking the largest such spike since January.

This suggests that traders are locking in profits, which weakens the overall market sentiment and makes a sustained rally less likely. The growing sell-side pressure, combined with weak spot demand, raises concerns that Solana could struggle to regain traction in the short term.

Speculative Interest in Solana

Despite weaker spot demand, derivatives traders have shown increased interest in Solana. Open interest (OI) in Solana futures surged by 15.8%, bringing the total OI to $5.05 billion. This suggests that speculative sentiment remains strong, with more than $1 billion in new positions opening, likely driven by the positive news surrounding the altcoin.

However, this increase in speculative activity has not been matched by strong demand in the spot market. The divergence between growing derivatives activity and weak spot accumulation presents a risk: if the speculative interest wanes, the resulting sell-off could trigger a liquidation cascade.

Conclusion: Risk of a Deeper Retracement

Solana’s recent price movement and technical indicators suggest that the altcoin is at a crossroads. The initial rally raised by the positive news has lost momentum, with rising sell-side pressure and weakening spot accumulation. If Solana cannot reclaim the $180 level and hold above it, the altcoin may face a deeper retracement. In this case, the $130 support level could once again be tested, potentially signaling further downside before any renewed bullish momentum. As it stands, Solana’s short-term price outlook remains uncertain, with a higher probability of a deeper pullback if current market conditions persist.