Solana breaks 200-day SMA, targets $100 after 25% weekly rally

Solana rose 25% to $93.39 on Aug. 21, clearing its 200-day SMA as a market-wide short squeeze lifted the token from a two-month range.

CoinGlass liquidation data shows forced purchases from short positions helped accelerate the move, with SOL climbing through several layers of short liquidity between $80 and $92. Futures volume jumped 177% to $13.7 billion while open interest rose 7.9% to $5.66 billion, according to Blockonomi data. Spot SOL ETFs drew $14.58 million in net inflows on Thursday, the strongest single-day accumulation since late July.

The next test sits at $93–$95, where remaining short liquidity is concentrated. A break above that zone could expose the May range high near $98 and the psychological $100 level.

Breakout follows $4B market-wide short squeeze

The rally followed a broader cryptocurrency short squeeze that erased more than $4 billion in bearish positions over 48 hours. Solana's faster rise relative to several large-cap assets reflected its tendency to record wider moves during shifts in crypto market risk appetite. Trading activity expanded during the breakout, supporting the move beyond the former range. SOL has now returned to price levels last seen in May, when sellers repeatedly defended the area between $94 and $98.

The derivatives-driven rally received additional support from Shinhan Asset Management's announced partnership with the Solana Foundation. The South Korean asset manager plans to test a Korean won-denominated tokenized bond fund modeled on BlackRock's BUIDL product. Network activity also supported the bullish narrative after Solana reportedly processed 1.2 billion non-vote transactions in one week, while the planned Alpenglow upgrade aims to reduce finality times.

Broader US market conditions helped risk assets as well. The US Treasury's decision to expand buyback operations for longer-maturity bonds, increasing the size from $2 billion to a minimum of $4 billion per operation, injected liquidity into markets. Washington's renewed push for the Digital Asset Market Clarity Act and the SEC's proposed Regulation Crypto Assets framework also contributed to improving regulatory sentiment, though both initiatives still require further action before becoming final policy.

Overbought RSI and liquidation map frame the $100 path

SOL's 14-day relative strength index reached 81.74, well above the 70 level commonly associated with overbought conditions. An overbought RSI does not require an immediate reversal, but it shows that price has risen much faster than its recent average and may need to consolidate before another sustainable advance.

SOL now trades above its 20-day simple moving average at $77.06, its 50-day average at $76.92 and its 100-day average at $76.38. The token also cleared the 200-day average near $81.18, which had acted as the most important long-term barrier on the chart. The tight grouping of the shorter averages around $76–$77 identifies the base of the breakout. A later decline into that region would represent a full retest, although nearer support sits at $87–$90.

The three-day CoinGlass liquidation heatmap shows remaining liquidity concentrated immediately above the market between roughly $93 and $95. A break through that area could produce another burst of forced buying, but the chart shows less dense liquidity once SOL moves beyond $95. Crypto trader Daan Crypto Trades identified approximately $98 as the next range high, while Altcoin Sherpa named $95 as the first target and $120 as a possible later objective if Bitcoin remains strong.

The heatmap also shows downside liquidity near $90, $88, and $86. The $86 area contains one of the brighter nearby clusters and could attract price if buyers fail to defend $90. A larger concentration remains around $80–$81, close to the daily 200-day moving average.

SOL's immediate bullish scenario requires a sustained close above the $93–$95 region. Clearing that zone would expose the May range high near $98, followed by the psychological $100 level. A confirmed move above $100 could strengthen the case that the longer decline from SOL's 2025 peak has ended.

The bearish scenario starts with rejection below $95 and a loss of $90. Such a move could return SOL to $87–$88, while a deeper correction would bring the 4-hour Bollinger midpoint near $83.54 and the 200-day average near $81.18 into focus. For US investors, Treasury yields, dollar strength, and progress on federal crypto legislation remain relevant outside factors. SOL's immediate direction, however, will likely depend on whether spot buying can replace the forced purchases that powered the initial squeeze.

This article is for informational purposes only and does not constitute investment advice.