Solana Consolidates Near $175 Amid Mixed Signals, Bullish Long-Term Outlook

Solana (SOL) has been consolidating near the $175 mark for approximately two weeks, showing mixed signals in the market. As of May 28, 2025, SOL is the only top 10 cryptocurrency with a negative funding rate of -0.0002%, indicating potential building pressure on the short side of the market. This negative funding rate suggests that short sellers are financing long positions, which typically points to a mild bearish sentiment. However, this drop is relatively shallow compared to the broader market, where most assets have maintained positive or neutral funding rates.

Despite the short-term bearish signals, Solana’s on-chain activity presents a more optimistic outlook. Long-term active addresses have been increasing, demonstrating persistent confidence from committed users and investors in the network. This growing user base suggests a healthy ecosystem that could support price increases over the long term and indicates that the broader community remains active and engaged, even as some traders hedge short positions.

Technically, Solana’s price has been consolidating around the $175 level, which has functioned as a key supply area where bears have executed several sell orders. The extended consolidation, ongoing since May 9, indicates that market participants on both sides are waiting for stronger signals before committing to either direction. The formation of a cup and handle pattern on Solana’s chart suggests a potential breakout beyond the $180 resistance level in the coming weeks. If this pattern plays out as expected, the resulting movement could be explosive, potentially driving SOL toward new all-time highs.

Several indicators remain positive. The Chaikin Money Flow (CMF) indicator shows positive capital inflows, while the On-Balance Volume (OBV) indicates that despite resistance rejections, selling pressure has not become overwhelming. The moving averages further support bullish momentum, suggesting buyers may soon gather enough strength to push prices beyond the critical $180 level. However, the spot average order size has not shown significant spikes in whale activity, indicating that larger holders are anticipating further price gains before making significant moves.

Over most of May, the spot taker Cumulative Volume Delta (CVD) has remained neutral. However, on May 25, the metric signaled that taker buy volume became dominant. While this represents just the beginning, a sustained trend of buyer dominance in the taker CVD would signal the potential for a strong rally ahead. The last instance of buyer dominance in this metric occurred in mid-November, when Solana climbed above the same $180 level after forming a nine-month range below this critical resistance point.

Despite short-term caution signals from the funding rate and resistance at $175, Solana’s overall market structure remains bullish. Price action on longer timeframes suggests that bulls maintain control of the broader trend. The continued activity from long-term investors further strengthens this bullish outlook. While short-term metrics warrant caution, the overall picture for SOL continues to favor potential price appreciation. For now, the $180 level remains the key hurdle for Solana to overcome. A decisive break above this resistance could trigger the next significant leg up in Solana’s price journey.