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The Solana pattern favored by traders actually turns out to be a 50% Crash Setup

The price of Solana has remained within an upward channel for over three months, but this structure may be hiding a continuation pattern that triggered a decline of more than 50% from mid-January to early February.

This token is about 3% above the lower trend line of that channel. On-chain data shows that holder confidence is beginning to weaken and short-term holder support is thinning. This condition only takes one bad day to break down to the downside.

Solana Upward Channel Looks Bullish, But the Pattern Carries Continued Risk

Solana COINBASE:SOLUSD has been moving within a parallel upward channel since February 6, with the bottom of the channel at the end of a decline of over 50% that occurred about three weeks from mid-January to early February.

This typically bullish channel appears convincing on the surface. SOL continues to form higher lows along the lower trend line and has tested the upper trend line once.

However, the details of the pattern are important. An upward channel formed immediately after a major decline often becomes a hidden continuation pattern, not a true reversal. Until SOL can close above the upper trend line, the larger bearish trend remains the most likely scenario.

Volume signals reinforce this warning. Buying volume has continued to decline since early February, even as the price continues to rally within the channel. This divergence indicates fewer dollars are supporting each new high above US$97. Currently, SOL is starting to move back down toward the lower trend line on thin volume.

On-chain notes explain why this is important now.

New Holder Accumulation Drops 13%

Solana Holder Net Position Change from Glassnode, a metric monitoring daily supply changes of coins held in wallets that have stored SOL for more than 155 days, has remained in positive territory since early March 2026. Holders have continued to be net buyers throughout the rally in early May.

This signal weakened this week. On May 25, the daily net position change peaked at around 3.2 million SOL—becoming one of the strongest accumulation days of this cycle. But on May 26, that number dropped to about 2.78 million SOL, a 13% correction in just 24 hours.

Holders are still accumulating, but at a clearly slowing pace. This slowdown occurred precisely as SOL started moving back toward the lower trend line of the channel. The group of holders who have been able to withstand selling pressure over the past three months is actually reducing buying pressure, right when the chart most needs them.

The question is, do the speculators still have reasons to hold?

NUPL Short-Term Holders Near Six-Month High

Solana Short-Term Holder Net Unrealized Profit/Loss (NUPL), a Glassnode indicator measuring whether SOL holders under 155 days old are in profit or loss, is currently at -0.157. This figure is well above the capitulation zone during the February crash.

It is also close to the six-month high of -0.03 recorded on May 11.

Strangely, this is a bearish signal. Short-term holders typically hold coins for two reasons. First, high confidence in upward potential. Second, low risk of decline. Currently, neither condition is met. The price chart is approaching breakdown levels, accumulation among holders is slowing, and unrealized losses for short-term holders are still minimal compared to previous capitulation moments.

The group that bears only small losses and has weak conviction usually sells faster than they hold through deeper corrections. This creates the potential for large supply to exit if the lower trend line breaks.

Now, the price chart is the trigger.

Solana Price Levels Between 3% Breakout and Channel Reclaim

The current Solana price is US$83.78, about 3% above the lower trend line of the channel at around US$81.24, which aligns with the 0.786 Fibonacci level of the recent April-May channel rally.

A daily close below US$81.24 confirms a channel breakdown. The first downside level after the breakdown is US$76.61 (1.0 Fibonacci). If the breakdown continues, the next target is US$63.21 (1.618 Fibonacci). If the move reflects a continuation of the late January decline, the price could head toward US$41.53 (2.618 Fibonacci), roughly 50% lower than current levels.

A bullish reset begins with gradually reclaiming levels. Returning to US$84.89 (0.618 Fibonacci) could temporarily halt bearish momentum. A daily close above US$87.45 (0.5 Fibonacci) is a key step, as this level has consistently capped upward attempts since May 20. After surpassing US$87.45, the upward path opens toward US$93.17 (0.236 Fibonacci).

A clean breakout above US$98.29 would fully weaken the continuation pattern. Currently, daily closes below US$81.24 distinguish between a normal correction within the channel and a 54% decline continuation that occurred in January.