Bearish Technicals Suggest a Pullback Toward $120
Solana (SOL) is flashing a bearish technical setup, with a classic head-and-shoulders pattern forming on the daily chart. The pattern’s neckline at $140 has already seen a breach, and a sustained breakdown could drive price lower toward the $120–$126 zone, according to the pattern’s projected target.
The bearish engulfing candle and a rising volume spike add weight to the downside scenario, as sellers gain momentum near critical resistance.
A continuation lower would bring SOL into a daily demand zone outlined between $95 and $120, a level that has historically triggered strong buyer interest and accumulation.
Key Resistance and Invalidating the Downtrend
To invalidate the bearish setup, SOL needs a decisive daily close above $157, which currently acts as the next major resistance level.
Until that breakout occurs, correlation with Bitcoin may drive SOL lower — especially if BTC retests the $100,000 support, amplifying sell pressure across the altcoin market.
Onchain Metrics Signal Long-Term Strength
Despite the bearish short-term chart, onchain data reveals promising fundamentals for Solana:
NVT Ratio Signals Undervaluation
The Network Value to Transactions (NVT) ratio for Solana has dropped below 10, the lowest since February 2025. This implies strong network usage relative to market cap, suggesting that the blockchain is active and undervalued.
Exchange Net Position Change Shows Accumulation
Glassnode data reveals large net outflows of SOL from exchanges, particularly on May 28, when over 4.6 million SOL left centralized platforms. This trend reflects long-term investor confidence, as moving tokens off exchanges typically implies holding and accumulation.
Recent inflows may be short-term positioning or profit-taking, but the broader withdrawal trend supports the idea of continued conviction in SOL’s fundamentals.
Conclusion: Short-Term Caution, Long-Term Opportunity
While technical indicators suggest a drop toward $120 is likely in the near term, robust onchain signals like low NVT and sustained accumulation point to resilient network fundamentals.
If price revisits the $120 demand zone, it may present a high-conviction entry point for long-term holders — especially if the broader crypto market stabilizes.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.