$3.5M SOL Staked—Why Solana Bulls Might Be Overlooking a Critical Red Flag

Solana’s rally gains momentum as investors lock up $3.5M in SOL—but beneath the hype, warning signs flash.

Staking surges don’t always mean smooth sailing. Network congestion, validator centralization, or even whale manipulation could turn bullish bets into bag-holding regrets. Remember: in crypto, ’number go up’ isn’t a risk management strategy.

Bonus jab: Wall Street would call this ’irrational exuberance.’ In DeFi? Just another Tuesday.

Are bulls getting trapped as long liquidations surge?

On the 25th of May, Long Liquidations reached $6.1 million across major exchanges, dwarfing just $326K in short liquidations. 

This stark imbalance reflects the market punishing overleveraged bullish traders amid recent downside price action.

Binance alone accounted for $2.76 million in long liquidations, reinforcing the dominance of sell-side momentum. 

Historically, such liquidation skews often signal a cooling market or potential reversal. Therefore, this could either mark the end of excessive long speculation or hint at deeper bearish pressure building up. 

The data emphasizes caution, especially for those still heavily positioned on the long side.

Source: CoinGlass

Despite the shakeout, why are 69% of traders still going long?

According to Binance’s Long/Short account data, 68.95% of traders held long positions in SOL. The long/short ratio stood at 2.22.

This shows that most retail traders remain optimistic, even after a heavy liquidation wave. 

However, such lopsided sentiment often precedes further volatility or shakeouts. If SOL continues its sideways movement or drops lower, these long positions could once again face liquidation pressure. 

It also suggests a disconnect between trader expectations and actual price momentum. Therefore, despite bullish sentiment, the market still holds significant risk for upside chasers.

Source: CoinGlass

Will SOL flip $193 or fail again as RSI cools?

SOL traded at $172.34 at press time, still struggling to break past the 0.786 Fib resistance at $193.

Despite its recent rebound, momentum has stalled as the Relative Strength Index (RSI) cooled to 61.87 from previous highs. This level still shows mild bullish control, but not strong enough to confirm a breakout. 

For bulls, reclaiming $193 is essential to target the next Fib zone at $229.46. However, repeated failures here could reinforce a range-bound structure or even invite downside continuation.

Source: TradingView

Why do outflows still dominate despite whale staking?

Spot market flows on the 25th of May revealed $158.93 million in Outflows compared to $141.42 million in Inflows, resulting in a Net Outflow. 

This divergence is significant as it suggests that while some whales are accumulating, broader market participants continue exiting positions. 

Therefore, the short-term price structure remains pressured by ongoing profit-taking or repositioning activity. 

Even with staking confidence growing, price performance will remain muted unless inflows sustainably outpace outflows. For now, sell-side signals are still present, dampening the impact of bullish on-chain events.

Source: CoinGlass

Is SOL ready for a breakout or due for more pain?

While whale accumulation and staking suggest long-term confidence, the dominance of long liquidations and persistent outflows point to near-term fragility. 

Unless SOL flips the $193 resistance with strong momentum and inflows improve, upside potential remains capped. 

Traders should prepare for more consolidation or downside if Leveraged bulls continue getting wiped out.