SOL drops below $130, why are whales rushing to buy?

Solana price fell below the key support of $130 this week, reaching a new low since early January, in line with the overall crypto market correction. However, amid the weakening price, on-chain activity shows clear divergence: whales and long-term holders are accelerating accumulation. The recent decline has been primarily driven by forced deleveraging in the derivatives market, but on-chain fundamentals remain active. This phenomenon is often seen as a vote of confidence from professional funds regarding Solana’s medium- to long-term prospects.

The Real Drivers Behind the Price Drop

SOL has declined from its high in early January to the current $127.38, nearly a double-digit drop. But this decline is not due to deteriorating fundamentals; rather, it results from sharp volatility in the derivatives market.

According to the latest data, over the past 24 hours, long positions were liquidated for nearly $60 million, while short positions amounted to only about $1 million, a ratio close to 42:1. This indicates that the decline was mainly caused by forced liquidations of long positions, not systemic selling. More tellingly, open interest has also decreased in tandem with trading volume expansion, a typical sign of high leverage deleveraging.

The overall market environment is also exerting pressure. The expectation that the new Federal Reserve Chair will shift from dovish to hawkish has increased, coupled with uncertainties related to Trump and the blockage of the crypto-friendly bill CLARITY in the Senate, leading to a rapid cooling of risk appetite in the short term. But these are emotional shocks and do not alter the fundamental logic of SOL.

Whales’ Actual Movements

While prices are falling, on-chain fund behaviors show clear divergence.

More importantly, long-term holders are actively accumulating. In mid-January, their net increase reached 3.85 million SOL, the highest in the past 15 months. The last time a similar accumulation occurred was in October 2024, after which SOL’s price nearly doubled. This historical pattern is fueling market expectations of a rebound.

From an on-chain supply and demand perspective, selling pressure is easing. On January 19, the tradable circulating balance of SOL decreased by about 5 million tokens, down to roughly 26 million, the lowest since 2023. This suggests spot holders prefer transferring tokens out rather than selling, indicating market confidence has not completely collapsed.

Fundamentals Remain Active

Whales are willing to buy at low prices because of the network’s inherent activity.

• Daily active addresses increased over 50% in a week, surpassing 5 million
• Daily transaction count rose to about 78 million
• Stablecoin supply reached a record high of $15 billion, reflecting continuous new capital inflows into the ecosystem

These data points show that the usage and engagement within the Solana ecosystem have not declined due to the price drop—in fact, they are still growing. This is a key signal that long-term value investors pay close attention to.

Technical Support for a Rebound

From a technical perspective, the trendline around $130 has become a critical defense line for SOL. The short-term RSI has already fallen into the extreme oversold zone, which often indicates a higher likelihood of a rebound.

Combined with ongoing whale buying and active fundamentals, market expectations for a short-term bounce are rising. But the key is whether this support can hold and if new funds will enter afterward.

Summary

Solana’s current trend presents an interesting phenomenon: prices are declining, but professional funds are accumulating. This divergence often occurs when market sentiment is extremely pessimistic, yet fundamentals remain healthy. The deleveraging in the derivatives market is the immediate cause of the recent decline, but active on-chain fundamentals and whale accumulation point to a different signal: this looks more like a emotional correction driven by profit-taking at high levels rather than a trend reversal. Whether a rebound can happen in the short term depends critically on whether the $130 support holds and if additional capital enters the market.