Is Solana (SOL) Approaching a Major Correction in 2026?

The Solana (SOL) ecosystem has long been a focal point for both bullish optimism and bearish caution. As 2025 draws to a close, the cryptocurrency's price action and on-chain fundamentals are increasingly signaling a potential major correction in 2026. This analysis examines the technical bearish formations, derivative positioning, and macroeconomic factors that could drive Solana into a prolonged downtrend, while also addressing the limited scope for short-term rebounds.

Technical Bearish Formations: A Double Top and Fractured Momentum

Solana's price has formed a classic double top pattern on the weekly chart since mid-2024, with a critical neckline at $120 acting as a pivotal resistance level. According to technical analysis, a confirmed breakdown below this threshold-currently near the price-could trigger a move toward $95, a level that has historically served as a key support zone. This pattern is reinforced by deteriorating momentum indicators: the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are trending downward, indicating sustained selling pressure. Data shows the RSI and MACD are trending downward, indicating sustained selling pressure.

Shorter-term charts also reveal bearish dynamics. On the hourly timeframe, Solana has formed a descending trend line with resistance at $124 and immediate support at $122 and $120. According to technical analysis, a breach below $120 could accelerate the decline toward $112 or even $105, with technical indicators like RSI and MACD already in bearish territory. Data shows technical indicators like RSI and MACD are already in bearish territory. While some analysts highlight a bullish bias above the $136.06 support level, this optimism is tempered by overbought RSI conditions and the presence of a harami cross pattern, which often precedes short-term pullbacks. According to technical analysis, a harami cross pattern often precedes short-term pullbacks.

On-Chain Fundamentals: A Weakening Ecosystem

Technical bearishness is compounded by deteriorating on-chain fundamentals. Solana's Total Value Locked (TVL) in DeFi protocols has plummeted from $35.1 billion to $23.8 billion, while protocol fees have also declined sharply. According to data, these metrics reflect reduced network activity and investor demand, which could prolong the downtrend. Additionally, spot ETF inflows-a key driver of institutional and retail demand-have slowed, further weakening the ecosystem's resilience. According to data, spot ETF inflows have slowed, further weakening the ecosystem's resilience.

2026 Price Predictions: Bearish Momentum vs. Flickers of Optimism

Looking ahead, the bearish case for 2026 remains robust. The 100-period EMA is on the verge of crossing below the 200-period EMA, a bearish signal that could deepen the correction. According to analysis, the 100-period EMA is on the verge of crossing below the 200-period EMA, a bearish signal that could deepen the correction. Derivatives positioning also reveals a net short bias across all trader brackets, with whale accounts and key Solana addresses aligned with this bearish stance. According to analysis, derivatives positioning reveals a net short bias across all trader brackets. However, a nuanced picture emerges: some smart money actors and public figures are incrementally opening long positions, potentially anticipating a January 2026 rally. According to analysis, some smart money actors are incrementally opening long positions.

Bullish scenarios for 2026, though limited, suggest a potential rebound to €127.54 (+15.71% from the current €110.22) in a bullish case and €117.76 (+6.84%) in a neutral scenario. According to prediction models, a sustained hold above $120 followed by a breakout above $135–$140 could target $160–$180. According to technical analysis, a sustained hold above $120 followed by a breakout above $135–$140 could target $160–$180. Yet, these outcomes hinge on the price avoiding a breakdown below $116, which would invalidate the bullish narrative and extend the bearish trend. According to analysis, these outcomes hinge on the price avoiding a breakdown below $116.

Contradictory Signals: Divergence and Caution

A critical divergence exists between short-term and long-term signals. While the RSI has shown a bullish divergence-with lower price lows paired with higher RSI lows-this may only delay, not reverse, the broader downtrend. According to analysis, the RSI has shown a bullish divergence, which may only delay, not reverse, the broader downtrend. Similarly, the $129 level, a key cost-basis cluster, could act as a catalyst for a short-term rally to $150 if breached. According to analysis, the $129 level could act as a catalyst for a short-term rally to $150 if breached. However, these countertrend moves are unlikely to alter the fundamental bearish thesis without a sustained increase in network activity and institutional demand.

Conclusion: A High-Probability Correction in 2026

Solana's technical and fundamental landscape in late 2025 paints a clear picture of a market primed for a major correction in 2026. The double top pattern, weak on-chain metrics, and bearish derivative positioning collectively suggest a high probability of a breakdown below $120, with $95 as a likely target. While short-term rebounds are possible, they are unlikely to reverse the broader downtrend unless the ecosystem sees a resurgence in TVL, fees, and ETF inflows. Investors should closely monitor the $120–$129 range and derivatives positioning for early signals of trend exhaustion or continuation.