Solana's 30% Rally Faces Whale Sell-Off Risks

Solana's recent price surge to $125 has raised concerns among traders about potential risks lurking beneath the surface. Despite the 30% rally from its April 7 low of $95, the cryptocurrency faces significant challenges that could derail its upward momentum.

One of the primary concerns is the behavior of large holders, or whales, who have been liquidating their positions. On-chain data reveals that a major whale recently sold 274,188 SOL at an average price of $108, locking in $11 million in realized losses. Even with the current price hovering around $125, this whale remains underwater, indicating that the overall market sentiment is fragile.

The distribution of Solana coins across different price levels further complicates the situation. The UTXO Realized Price Distribution (URPD) highlights three major supply clusters around $100, $120, and $140. The $140 zone is particularly noteworthy, with over 27.8 million SOL concentrated there, representing approximately 4.75% of the total circulating supply. This cluster acts as a key area of resistance, as many holders are either near breakeven or facing unrealized losses.

If Solana fails to reclaim the $140 level, the risk of whale-driven sell-offs remains high. 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. However, until this level is tested, price volatility in Solana’s price action is likely to persist. Additionally, 38 million SOL remain clustered between $117 and $120, making this range a potential hotspot for profit-taking as the price breaks this ceiling.

The recent rally in Solana is not solely driven by spot prices; 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. While this appears bullish, it also introduces fragility. The whale distribution remains active, and Short-Term Holders (3–6 months) are still deep in the capitulation zone. The recent breach of a high-density supply zone ($117–$120) sets the stage for elevated liquidation risk.

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.