Solana’s 25% Rally Above $90: Short Squeeze, ETF Flows and the $100 Test

Solana’s August 2026 surge was best understood as a regulatory-relief and positioning rally, not as proof that SOL had returned to its previous-cycle strength. The token gained approximately 25% in seven days and broke above $90 after the SEC proposed a new crypto-asset regulatory framework. A broader high-beta crypto rally, improving reported ETF flows and a Solana network speed upgrade added support, while short covering accelerated the move. 2367

SOL was still trading well below its January 2025 peak of roughly $293–$294, so the breakout marked a sharp recovery from depressed levels rather than a full recovery of the prior trend. 814

What drove the move above $90?

The first catalyst was a change in regulatory expectations. Market coverage linked the SEC proposal to improved risk appetite for crypto assets, helping SOL clear earlier resistance near $78 and then the $89–$90 moving-average area. 67

The move was reinforced by three additional forces:

• A broader risk-on crypto rally: SOL behaved like a high-beta asset as wider market momentum improved. 224
• Network-upgrade optimism: Reports connected the rally with the activation or rollout of a faster Solana mainnet slot time, which investors viewed as a potential network-quality and adoption catalyst. 11224
• Positioning pressure: Once SOL moved through previous resistance and several major moving averages, leveraged short sellers faced pressure to close positions by buying SOL, adding fuel to the advance. 314

That combination matters because the regulatory headline may have started the move, but the technical breakout and derivatives positioning helped determine its speed.

How the short squeeze changed price action

SOL advanced from roughly $76 into the low-to-mid $90s during the late-week move. One report recorded a range of approximately $87.72 to $102.74 before the token returned near $94. 718 Another report said SOL briefly traded above $100 before pulling back, showing how quickly liquidity conditions changed around the breakout. 41

Short liquidations likely amplified the rally, but the often-repeated claim of $4.6 billion in short liquidations is not independently corroborated by the available evidence. It should therefore be treated as a reported estimate rather than a confirmed market-wide total. 211

The more defensible conclusion is that derivatives activity contributed materially to the volatility. A separate analysis said derivatives, rather than an equally strong wave of spot buying, were shaping the breakout. 41 That distinction is important: a liquidation-driven move can produce dramatic upside while still leaving the market exposed if fresh spot demand does not continue.

Sentiment turned bullish—but increasingly crowded

The Crypto Fear & Greed Index was reported at 76 during the rally, placing sentiment firmly in bullish territory. 2 That helped sustain momentum, but it also signaled that traders were becoming more willing to take risk after the breakout.

The sentiment shift was visible in price behavior: SOL cleared the $90 barrier, briefly tested the psychological $100 level and then pulled back. The rejection near $100 suggested that sellers remained active in the immediate supply zone. 41

Technical signals: strong momentum, high reversal risk

The rally carried SOL above its 20-day, 50-day, 100-day and 200-day moving averages. The 200-day average area near $89–$90 consequently became the most important test of whether the breakout could hold. 14

Momentum indicators were also stretched. Contemporary technical reports placed the 14-day RSI around 81.74 to 84, well above the commonly used 70 overbought threshold. 143436 An overbought RSI does not guarantee an immediate reversal, but it shows that price had risen much faster than its recent average and increased the risk of consolidation or a sharp retracement. 34

Technical readings were not uniform across every snapshot: one later Investing.com reading showed RSI near 48.8, while stochastic measures remained weak. 43 That variation reflects different observation times and reinforces why a single indicator should not be treated as a market consensus.

Key SOL levels to watch

The breakout produced a relatively clear map of the next decision points:

• $95–$100 resistance: This was the immediate supply zone, with $98 and $100 repeatedly identified as nearby objectives. 121441
• $102–$105 upside area: A sustained close above $95–$100 could make this the next recovery zone, provided ETF flows and broader crypto momentum remained supportive. 67
• $87–$90 support: This area included the former breakout and 200-day-average region. Holding it would help confirm that resistance had turned into support. 3614
• $83–$85 support: Losing the $87 area would make a deeper retracement toward this zone more plausible. 1841
• Around $80–$82: Some analysis identified this as a deeper support and moving-average cluster if the initial breakout failed. 3241

One technical model assigned a 60–65% probability to a near-term bearish pullback if SOL failed to reclaim and hold the $95.08 pivot. That is a single analyst model, not a market-wide forecast. 32

Did ETF flows confirm institutional demand?

ETF flows offered supporting evidence that demand was improving, but they did not establish a one-way institutional accumulation trend.

Reported U.S.-listed spot SOL ETF inflows included approximately $8.8 million on August 10, described as the strongest single-day inflow since May 12. Cumulative inflows were reported above $1.15 billion, with total net assets near $878 million to $906 million, depending on the reporting date and measure used. 212526

A later report cited approximately $14.58 million in single-day inflows on August 20, the strongest reading since late July, alongside a third consecutive day of positive flows that week. 1422 These figures supported the view that institutional access and demand were improving during the breakout.

The caveat is that the trend had been uneven. July’s net ETF inflow was reported at only $14.6 million, following June outflows, and another report noted that several ETF products recorded zero net flows over a five-day period in late July and early August. 827 The evidence therefore supports renewed demand, but not an unqualified claim that institutional buying was accelerating continuously.

What did the daily-active-user crossover suggest?

Analysts also highlighted a crossover between the 30-day and 50-day moving averages of Solana daily active users. In simple terms, the shorter activity trend moving above the longer trend can indicate improving network engagement and a possible shift in adoption momentum. 1923

However, the available evidence does not provide a reliable, quantified 2025 precedent or prove that the crossover caused the price rally. It is better treated as a supporting on-chain signal than as a standalone trading indicator. The crossover strengthens the recovery narrative only if activity remains elevated and is accompanied by sustained spot demand, liquidity and network usage.

Upside case: what would confirm continuation?

The bullish case required more than a brief move through $100. The stronger confirmation would be a sustained close above the $95–$100 resistance band, followed by a successful retest of that area as support. Continued ETF inflows, stable broader-market risk appetite and evidence that buying was not solely liquidation-driven would improve the quality of the breakout. 6714

Under that scenario, $102–$105 would be a reasonable next reference area. Prediction data gave SOL a 55.5% chance of reaching $100 during the referenced August period, but that figure describes a market-implied probability rather than a guaranteed target or investment forecast. 4

Downside case: why the rally could fade quickly

The main risk was that SOL had moved faster than underlying demand. If sellers continued to reject the $95–$100 zone, the first test would likely be $87–$90. A decisive loss of that support would shift attention toward $83–$85 and potentially the $80–$82 area. 3241

A retreat would not necessarily invalidate the longer-term recovery case; it would show that the market needed to absorb the short-squeeze gains. The risk would become more serious if ETF inflows weakened, broader crypto sentiment reversed or SOL failed to hold the former breakout zone.

The probability of a much larger recovery also remained limited in the cited prediction data. One market-based estimate gave SOL only an 8% chance of reclaiming $150 during the year. 8 Prediction-market odds are useful as a snapshot of positioning and sentiment, but they are not calibrated investment forecasts.

Bottom line

Solana’s August surge combined a regulatory catalyst with a technical breakout, improving ETF flows, network-upgrade optimism and forced short covering. Those ingredients explain both the speed of the move and the sharp volatility around $90–$100.

The key question was whether SOL could convert the breakout into durable support. Holding $87–$90 after testing $95–$100 would keep the recovery structure intact. A clean break and hold above $100 would strengthen the continuation case, while a fall back through $87 would suggest that leverage and momentum had done more work than sustained organic demand.