Solana Drops 4.7% Amid Institutional Adoption and Technical Breakout

Solana (SOL) is currently trading at approximately $173, marking a 4.7% decline over the past 24 hours. Despite this recent dip, several technical indicators and institutional developments suggest a potential rally for the cryptocurrency.

Solana's price correction follows a high of $184.75, with traders now focusing on key support levels, particularly at $172, to maintain bullish momentum. The inclusion of Solana in VanEck’s Multi-Chain Treasury Fund has bolstered the network’s institutional reputation. This fund, which tokenizes U.S. Treasury assets across multiple blockchains, includes Solana alongside Ethereum, Avalanche, and BND Chain. Notably, the minimum investment for Solana-based exposure through this fund is $100,000, compared to $1 million on Ethereum, potentially attracting more institutional investors to the Solana ecosystem.

Technical analysis indicates that Solana has broken above the Ichimoku Cloud on the daily chart, signaling a potential trend reversal. This breakout is accompanied by positive momentum indicators, including a bullish crossover in the Moving Average Convergence Divergence (MACD). On the hourly chart, a short-term declining channel or bullish flag pattern is forming with support at $172, which often precedes continued upward movement. Solana has already cleared immediate resistance around $164 and is preparing for a move toward the next major resistance level at $211. Key resistance levels to watch include $180, $185, and $191.25, with a major barrier at $211 that could open the path to $240 if breached.

Derivatives data shows strong positioning for Solana, with SOL’s perpetual futures markets maintaining positive taker Cumulative Volume Delta (CVD) for 83 consecutive days. This extended period of derivatives optimism contrasts with SOL’s spot price, which remains about 30% below its most recent peak. The disconnect between futures market sentiment and spot price action raises questions about upcoming market dynamics. While futures traders remain positioned for upside, the lag in spot prices could either signal an approaching surge as spot buyers enter the market or suggest a possible correction if the gap fails to narrow.

Elliott Wave analysis reveals that Solana’s recent movement forms a “five-wave pattern” that could indicate the beginning of a larger impulse wave. According to the analyst's forecast, the current structure reflects wave 1 of a bigger pattern that might ultimately approach $360 or higher. However, a daily close below $172 would indicate that a price top has formed and could trigger retracement toward the upper-$160s or possibly the mid-$150s before the next leg up begins. For SOL to validate the bullish outlook, it must maintain support at $172 and subsequently break above $180. If these conditions are met, Solana appears positioned for a potential rally toward the psychologically important $200 level in the near term.

The cryptocurrency’s short-term price action shows some weakness, but the combination of institutional adoption via VanEck’s VBILL fund, technical breakout above the Ichimoku Cloud, and favorable derivatives sentiment builds a strong case for possible bullish continuation. Solana formed a base above the $155 support before starting its recent increase. The price dipped below the 50% Fibonacci retracement level of the upward move from the $166 swing low to the $185 high, but bulls remain active above the $172 level. If SOL fails to rise above the $180 resistance, it could start another decline with initial support near the $172 zone and major support at $170. A break below $170 might send the price toward $162, with further decline possible to $150 if the $162 support fails to hold. The cryptocurrency’s hourly MACD is losing pace in the bullish zone, while the RSI sits below the 50 level, indicating some short-term weakness.