Is Solana (SOL) Set to Break Above $135 and Confirm a New Bullish Cycle?

The question of whether Solana (SOL) can break above $135 and ignite a sustained bullish cycle hinges on a delicate interplay of technical and fundamental catalysts. As the cryptocurrency consolidates near critical support levels in late December 2025, the convergence of on-chain activity, network upgrades, and institutional adoption creates a compelling case for a near-term breakout. This analysis examines the technical indicators, on-chain metrics, and macroeconomic factors that could propel Solana into a new phase of growth.

Technical Analysis: A Tipping Point at $135

Solana's price action in late December 2025 has been characterized by a tug-of-war between buyers and sellers, with the $125–$140 range acting as a key battleground. The $135 level, in particular, has emerged as a pivotal support zone. According to a report by MEXC, if this level holds, it could confirm a bullish continuation and push the price toward $140 and beyond. On the 4-hour timeframe, the Chaikin Money Flow (CMF) has turned mildly bullish, while the Bull Bear Power (BBP) shows increasing buying pressure, though without strong conviction.

The $135 threshold is also critical from a structural perspective. Technical formations such as bullish flags and V-shaped reversals suggest a potential rally toward $260, contingent on volume confirmation and sustained buyer interest. A break above $146.91 could trigger a cascade of institutional buying, with analysts projecting a target of $189.13. However, risks remain: a failure to hold $135 could lead to a deeper correction toward $125 or even $116.88.

On-chain metrics add nuance to this narrative. While daily active addresses have declined due to macroeconomic pressures, the Chaikin Money Flow (0.08) and robust volume at $140 indicate genuine demand. The Directional Movement Index (DMI) still favors sellers, but the narrowing gap between positive and negative directional indicators suggests waning bearish momentum.

Fundamental Catalysts: Network Upgrades and Institutional Adoption

Solana's technical resilience is underpinned by a wave of fundamental upgrades and strategic partnerships. The Firedancer upgrade, fully activated by December 2025, has pushed the network to handle over 50,000 blocks without issues and approach 1 million transactions per second (TPS). This performance leap, combined with the Alpenglow consensus improvements, has solidified Solana's reputation as a scalable, secure blockchain, attracting both developers and institutional investors.

Ecosystem growth has also been a major driver. Solana's DeFi and lending markets have expanded, with TVL in lending markets reaching $3.6 billion by year-end, up 33% from 2024. Partnerships with stablecoin giants like Circle, Tether, and Securitize have brought over $15 billion in stablecoin supply to the network. These developments position Solana as a hub for decentralized finance and real-world asset tokenization, with institutional capital flowing in through ETFs and derivatives.

Late-December 2025 also saw a surge in ecosystem innovation. Phantom and Solflare launched zero-fee prediction markets, while the Solana Foundation introduced Kora, a tool enabling fees to be paid in any token. Sunrise DeFi's day-one liquidity model and J.P. Morgan's commercial paper issuance on Solana further underscore the network's growing utility in traditional finance.

Macro Factors: ETFs and Regulatory Tailwinds

The macroeconomic landscape has shifted in Solana's favor. The launch of Solana spot ETFs in Q4 2025 attracted strong early inflows, with liquidity rising alongside growing institutional demand. These products, coupled with rising derivatives activity, have created a self-reinforcing cycle of capital inflows and price discovery.

Regulatory clarity has also played a role. While high interest rates and scrutiny of crypto markets persist, Solana's focus on institutional-grade infrastructure-such as its 1.5-year streak of 100% uptime and high-speed settlement capabilities-has insulated it from broader market volatility. The Royal Government of Bhutan's plan to tokenize its sovereign gold reserves on Solana via DK Bank represents a geopolitical milestone, further diversifying the network's use cases.

Conclusion: A Convergence of Forces

The case for Solana breaking above $135 and confirming a new bullish cycle rests on the alignment of technical, fundamental, and macroeconomic factors. On the technical front, the $135 support level and bullish divergences in indicators like MACD and RSI suggest a high probability of a breakout. Fundamentally, the Firedancer upgrade, ecosystem expansion, and institutional partnerships have created a flywheel effect, driving both utility and capital inflows. Macro factors including ETF demand and regulatory tailwinds add further momentum.

However, risks remain. A breakdown below $135 could reignite bearish sentiment, particularly if macroeconomic conditions deteriorate. For now, the balance of evidence tilts toward a bullish outcome, with Solana poised to capitalize on its unique position at the intersection of performance, innovation, and institutional adoption.