The $96 Absorption Zone: CMF bullish divergence during SOL's 15% decline to $95.87 reveals whale accumulation, not genuine buying interest. The 5.26% short-term holder dominance creates a structural vulnerability above $120.
🔍 Technical Analysis | 🔗 Source: Glassnode, TradingView, CoinGlass
Risk Disclaimer: This analysis examines Solana's price structure and on-chain metrics based on publicly available data. Cryptocurrency investments carry substantial risk of total loss. The $120 liquidation target discussed is a technical level, not a price prediction. Solana could break below $96 support if whale absorption proves insufficient. Past market patterns do not guarantee future results. Always conduct independent research and consult qualified financial advisors before trading. The author and publisher are not liable for losses arising from the use of this information.
📊 Solana Liquidity Trap Metrics
Verified data from Glassnode, TradingView, and CoinGlass as of February 3, 2026.
The $96 Support Mirage: CMF Divergence as Whale Order Absorption
Solana's 8% rebound from the $95.87 low appears to validate the Chaikin Money Flow (CMF) bullish divergence—the indicator rose while price fell, traditionally interpreted as "smart money" accumulation. However, this interpretation commits a critical error: conflating capital inflow with genuine buying conviction. According to CoinGlass order flow data, the divergence coincided with a 40% increase in limit buy orders placed by addresses holding 10,000+ SOL, while retail market orders declined 22%.
This pattern—large limit orders absorbing retail selling—is characteristic ofliquidity absorption, not directional positioning. Whales accumulate inventory to create artificial support, only to reverse and liquidate long positions into retail FOMO above key resistance levels. The CMF divergence measures volume-weighted price movement but cannot distinguish between patient accumulation and tactical order book manipulation.
The CMF bullish divergence during SOL's decline to $96 signals whale inventory accumulation, not genuine buying interest. This creates a liquidity trap where apparent support is manufactured to absorb retail supply before a reversal.
Supporting this, liquidity trap analysis shows similar patterns preceded major altcoin reversals in Q4 2025. The key tell: spot exchange reserves increased 3.2% during the "accumulation," indicating whales were moving SOL onto exchanges to provide liquidity for eventual distribution, not removing supply from markets.
HODL Waves Breakdown: 5.26% Short-Term Dominance as Systemic Risk
Glassnode data reveals the 1-day to 1-week HODL Wave cohort increased holdings from 4.38% to 5.26% between December 31 and February 1—representing a 20% relative increase in short-term speculative positions. While long-term liveliness declined (suggesting holders stayed patient), the short-term cohort now controls enough supply to dominate price action near resistance.
This structural shift is critical: short-term traders buy dips and sell quickly into rebounds, creating reflexive selling pressure that accelerates as prices approach their breakeven levels. The $120.88 liquidation frontier coincides with the average cost basis of this cohort, meaning a move above $120 would trigger widespread profit-taking that could overwhelm whale absorption capacity.
The Short-Term Holder Liquidation Cascade
Phase 1 - Accumulation: Short-term traders buy the dip at $96, representing 5.26% of circulating supply.
Phase 2 - Breakeven: As price approaches $120.88, this cohort reaches average breakeven, triggering 30-40% sell orders.
Phase 3 - Cascade: Whale absorption fails as selling volume exceeds buy-side liquidity, forcing price below $96 and liquidating levered longs.
The FTX Overhang: Why Post-Bankruptcy Liquidations Differ From 2022
The FTX estate still holds 4.18 million staked SOL ($977M) after redeeming 8.98 million SOL since November 2023. Unlike the 2022 collapse, current redemptions follow a scheduled distribution to creditors, creating predictable selling pressure. The September 2025 redemption of 192,000 SOL preceded a 14% price decline, suggesting these distributions function as liquidity events that suppress rallies.
According to The Block's FTX analysis, the estate's next major distribution is scheduled for March 31, 2026, with a record date of February 14. This creates a window where creditors receiving SOL may immediately sell to realize bankruptcy claim values, adding 200,000-500,000 SOL of monthly selling pressure through Q2 2026.
This structural difference from 2022 is profound: rather than a sudden collapse, SOL faces chronic distribution pressure that prevents sustainable rallies. The $96 "support" may simply represent the price level where FTX distribution selling is absorbed by whales, not genuine equilibrium.
The Bankruptcy Distribution Paradox
Current Price: $103.15 reflects whale absorption of FTX creditor sales below $96.
Near-Term Risk: February 14 record date for next distribution triggers anticipatory selling from creditors.
Structural Headwind: Unlike 2022's acute collapse, chronic FTX distributions create a "cap" on rallies until the estate is fully liquidated in 2027.
The $120 Liquidation Frontier: Why It's the Real Battleground
Technical analysis identifies $120.88 as the critical level for three reasons: it's the January 29 breakdown point, aligns with the 20-day EMA, and marks the short-term holder breakeven level. But the liquidation data reveals a more urgent dynamic: CoinGlass shows $847 million in leveraged long positions opened between $115-$125 since January 28.
These positions represent retail traders who bought the dip with leverage, expecting a V-shaped recovery. As price approaches $120, margin requirements increase, forcing additional collateral deposits. If price reaches $125-$128, 40-50% of these positions face liquidation, creating a cascade that could push SOL back to $96 within hours.
The CMF divergence that appeared bullish below $96 becomes a liability above $120—whales who accumulated at lower prices now have inventory to sell into leveraged FOMO, triggering the very cascade they avoided on the way down. According to validator stress analysis, similar liquidations in September 2025 caused a 15% drop in 12 hours.
$120 represents a liquidation threshold where $847M in levered longs face margin calls. Whale inventory accumulated at $96 will be sold into this buying pressure, creating a reversal cascade that validates the liquidity trap thesis.
Three Post-FTX Scenarios: Absorption, Capitulation, or Stagnation
Scenario 1: Successful Whale Distribution
Whales absorb FTX distributions and retail selling below $96 until the March 31 estate payout completes. By Q2 2026, with FTX overhang removed, SOL rallies toward $148. This requires institutional infrastructure improvements and no macro shocks.
Scenario 2: Liquidation Cascade
Price reaches $120.88, triggering $847M in leveraged liquidations. Whales reverse position, selling accumulated inventory. SOL crashes below $96 toward $77, liquidating late buyers and resetting the absorption phase. This mirrors January 2026's macro meltdown dynamics.
Scenario 3: Extended Compression
SOL trades between $96-$120 for 3-4 months as FTX distributions continue and whales gradually reduce positions. This creates a new normal range where volatility collapses but upside remains capped. Short-term traders dominate, making it a scalper's market.
About the Author: Alexandra Vance
Alexandra Vance is a market analyst specializing in token velocity mechanics, on-chain analytics, and the intersection of social media sentiment with cryptocurrency price discovery.
Risk Disclaimer: This analysis examines Solana's structural vulnerabilities and on-chain metrics based on publicly available data. Cryptocurrency investments carry substantial risk of total loss. The $120 liquidation scenario discussed is one potential outcome, not a prediction. Solana's price could break below $96 support if whale absorption proves insufficient. FTX estate distributions may continue through 2027, creating persistent selling pressure. Past liquidation patterns do not guarantee future price action. Always conduct independent research and consult qualified financial advisors before trading. The author and publisher are not liable for losses arising from the use of this information.
Update Your Sources
For real-time monitoring of Solana's liquidity structure and FTX distributions:
- CoinGlass SOL Tracker – Live liquidation levels and open interest data
- Glassnode Studio – HODL Waves, Liveliness, and holder behavior metrics
- Solscan Staking – FTX estate staked SOL tracking and distribution monitoring
- The Block FTX Dashboard – Bankruptcy distribution timeline and creditor payouts
- CoinTrendsCrypto Liquidity Analysis – Historical liquidity trap patterns and altcoin case studies
Note: FTX estate distribution schedule is subject to bankruptcy court approval. On-chain metrics update every 24 hours. Liquidation levels change dynamically based on new leveraged positions. Verify all data through multiple sources before making trading decisions.
Frequently Asked Questions
CMF measures volume-weighted capital flows. A bullish divergence occurs when price falls but CMF rises, suggesting accumulation. However, on SOL this reflects whale limit orders absorbing retail selling, not genuine buying conviction. The divergence signals liquidity absorption, not directional positioning, making it a potential trap for retail traders expecting a rally.
$120.88 marks three confluence points: the January 29 breakdown level, the 20-day EMA, and the short-term holder breakeven price. More critically, CoinGlass shows $847M in leveraged longs opened at $115-$125. A move above $120 would trigger margin calls and forced liquidations, creating a cascade risk. This makes it a liquidation frontier rather than simple resistance.
The FTX estate still holds 4.18M staked SOL ($977M) and has been redeeming 150,000-200,000 SOL monthly since November 2023. Scheduled distributions to creditors create predictable selling pressure. The next major payout is March 31, 2026, with a February 14 record date. This chronic distribution acts as a price cap, preventing sustained rallies until the estate is fully liquidated around 2027.
HODL Waves show the distribution of holdings by time held. Glassnode data shows the 1-day to 1-week cohort increased from 4.38% to 5.26% of supply, representing short-term traders. These holders buy dips and sell quickly into rallies, creating volatility. Their 20% increase makes them dominant near resistance levels, threatening rallies with reflexive selling pressure.
Falling liveliness suggests long-term holders aren't selling, which appears bullish. However, this metric is misleading during periods of whale absorption. Large holders can accumulate without moving coins on-chain. The real signal is the 5.26% short-term holder dominance, which represents active trading supply. Liveliness decline + short-term increase = mixed structure favoring volatility, not trend.