Solana rally reaches $120 as institutional accumulation meets massive short squeeze
After Solana’s sharp advance, the market is entering a more complicated phase. The key question is no longer how fast SOL can rise, but whether demand can hold up once the initial burst of momentum begins to fade.
98.59
103.85
DeFi Development Corp. said it added 101,381 SOL to its reserve over the past week, bringing total holdings to roughly 2.49 million SOL and SOL equivalents. That represents an increase of about 4.24% in its treasury over the period.
The bigger short-term accelerator across crypto, however, was the short squeeze. CoinGlass data on September 22 showed roughly $1.06 billion in liquidations over 24 hours, with around $844 million coming from short positions.
Against that backdrop, SOL gained around 7% on September 21 and reached $119.99.
SOL needs a clean break above $120 to extend the rally
The alternative setup from the previous analysis played out in full. SOL cleared the $107 target with little resistance and accelerated to $119.99.
After such a large liquidation wave, the market often needs time to reset. A period of consolidation between $110 and $120 therefore remains the base case over the next several days.
Overbought conditions and a bearish divergence on the RSI (14) remain the main technical risks, both of which could slow the upside momentum.
A decisive break above $120 could trigger another round of liquidations. If that happens, the next resistance level would sit near $128.50.
The next move depends on what remains after liquidations cool
SOL’s latest move was driven by two different forces: underlying demand and forced short covering. The first can support a more durable trend, while the second can temporarily exaggerate the speed of the move.
That makes a pause near $120 relatively natural. If SOL can hold within the $110–120 range without a meaningful deterioration in demand, the market will have time to absorb the effects of the squeeze.
A fresh breakout above $120 would then carry more weight, suggesting that the rally is being sustained not only by liquidations but also by continued demand for the asset itself.
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