Is Solana's $130–$140 Zone a Reliable Cyclical Bottom?

The Solana (SOL) price action over the past quarter has drawn intense scrutiny from traders and analysts, particularly around the $130–$140 support zone. This range has emerged as a focal point for potential trend reversal, with technical indicators and on-chain metrics suggesting a mix of bearish exhaustion and emerging bullish momentum. To assess whether this zone represents a cyclical bottom, we must dissect the interplay of on-chain dynamics, institutional flows, and technical signals.

Technical Analysis: RSI Divergence and Volume Profile

Solana's price has oscillated within the $130–$140 range for weeks, with the Relative Strength Index (RSI) entering oversold territory below 50, signaling weak buying momentum. However, a critical bullish divergence has emerged in the past 30 days: while the price has declined to $130, the RSI has shown higher lows, hinting at waning bearish pressure. This divergence, coupled with a descending channel pattern, suggests traders are defending the $140–$142 consolidation zone.

Volume profiles reinforce this narrative. Over the past month, Solana has consolidated around $140.46, with high-volume support forming at $140.40 and resistance at $142.65. A break above $142.65 could trigger a move toward $200, but a failure to hold above $140 risks a retest of the $123–$135 range. The 78.6% Fibonacci retracement level at $126 also looms as a critical psychological threshold.

On-Chain Metrics: Whale Accumulation and ETF Inflows

On-chain data reveals robust institutional and whale activity within the $130–$140 zone. A major whale recently deposited $5 million USDC into Hyperliquid and purchased 35,335 SOL at $143, underscoring active demand near this range. Long-term holders (LTHs) have also increased accumulation, with reduced selling pressure observed in recent weeks. This behavior aligns with historical patterns where LTHs act as stabilizing forces during market corrections.

Institutional interest is another key driver. Solana ETFs have recorded $382 million in inflows over 14 consecutive days, including $357.8 million from Bitwise and $24.4 million from Grayscale. These inflows suggest growing confidence in Solana's fundamentals, particularly its high transaction volumes and DeFi TVL exceeding $5 billion.

Market Context: Altcoin Season and Network Fundamentals

Solana's performance remains tied to broader market trends. While altcoins like SOL have underperformed Bitcoin in recent months, historical cycles indicate altcoin seasons often follow Bitcoin's stabilization in a defined range. Solana's network fundamentals-such as its high throughput, low fees, and recent support for wrapped Bitcoin (WBTC)-position it to benefit from renewed risk-on sentiment.

However, risks persist. The Moving Average Convergence Divergence (MACD) has yet to cross into bullish territory, and a weekly decline of over 12% has left the price below the 100-hourly simple moving average. A breakdown below $130 could shift focus to the $110–$130 zone, historically a stronger support during sell-offs.

Conclusion: A Cautious Bull Case

The $130–$140 zone exhibits characteristics of a cyclical bottom, supported by RSI divergence, whale accumulation, and ETF inflows. Yet, confirmation requires a sustained breakout above $142.65 or a successful defense of the $130 level. Traders should monitor on-chain exchange flows and institutional activity for further signals. While the bearish case remains valid, the confluence of technical and on-chain factors suggests this zone is a high-probability reversal area-provided broader market conditions align.