Key Takeaways

Solana (SOL) is showing a bearish structure as it struggles below the $150 resistance.
Circle (USDC) has significantly minted new tokens on Solana, but the impacts on SOL's stability are unclear.
A divide among Solana's whales has led to volatility, with some taking long positions and others profiting from shorts.
The current market setup risks testing the $120 support level significantly.

Solana’s leverage-driven tug of war puts $120 support at risk - How?

The reasoning is straightforward: As the market remains stagnant, speculative bubbles grow larger, pushing leading cryptocurrencies into a cycle of volatility. This means that any significant price movement could result in substantial financial loss.

Solana (SOL) is exemplifying this trend well. After attempting to breach the $150-resistance level three times in November without success, it is now indicating a clear bearish trend, with the $120 mark emerging as a key area of concern.

SOL
Source: TradingView (SOL/USDT)

At the same time, Circle (USDC) is capitalizing on this volatility.

Recently, based on insights from Onchain Lens, Circle minted an additional $500 million worth of USDC on Solana. In total, for 2025, Circle has minted an impressive $55 billion on the Layer 1 platform, providing the market with significant liquidity.

Despite this influx, SOL continues to struggle to regain crucial levels, leading to the critical question: Is this added liquidity actually contributing to market stability, or is it exacerbating further volatility in altcoins?

Solana's Whales – A Battle of Bulls and Bears

As of now, the sentiment among Solana's whales appears divided as SOL trades at approximately $120.

On one hand, a whale took a position with 20x leverage on longs but now faces a staggering unrealized loss of $5.88 million, reducing total profits from $18 million to only $3 million. Events like this place pressure on essential SOL levels.

Conversely, a bearish whale has taken a position as well, accruing gains of over $27.7 million while gradually securing profits. This showcases classic market dynamics and underscores AMBCrypto's analysis of Solana's intense volatility.

Solana
Source: Hyperbot

In essence, liquidity is evidently increasing in Solana’s speculative sector.

However, it’s important to note that whales are the ones placing these bets, seeking to profit from the volatility. Given the current state of affairs, shorting SOL seems to be yielding higher rewards, pitting whales against the token itself.

Overall, with Solana’s bearish trend, long-oriented whales, and ongoing high volatility, the situation appears ideal for bears to entrap over-leveraged long positions. This could place the critical $120 support for SOL at significant risk of being breached.

Final Thoughts

The ongoing tug of war among Solana's whales amid mounting volatility highlights the delicate balance of the market, making any significant price movement a focal point for traders.