Solana Faces 15% Drop Risk Despite Bullish Onchain Data

Solana (SOL) is currently facing a bearish outlook, with its daily chart indicating a potential drop to $120. This forecast is based on the formation of a bearish engulfing pattern and a head-and-shoulders pattern on the 1-day time frame. The head-and-shoulders pattern suggests a bearish reversal signal, and a breakdown below the $140 neckline level could lead to further price declines. The downside target from this pattern is around $126, supported by the immediate liquidity zone. However, the daily demand zone, outlined by the order block between $95 and $120, could act as a strong source of buyer demand and potentially halt the decline.

Despite the bearish technical indicators, onchain data for Solana continues to show a bullish picture. The Network Value to Transactions Ratio (NVT) has dropped below 10, its lowest score since February 2025. This suggests strong network usage relative to its market value, indicating long-term potential despite the current price fluctuations. Additionally, the Exchange Net Position Change chart reveals consistent SOL withdrawals from exchanges, a trend that has recently begun to rise again. This indicates growing investor confidence, as holding SOL off exchanges often signals accumulation for future gains. The data shows a significant net outflow, with peaks of -4.6 million SOL on May 28, followed by a recent uptick in deposits, which aligns with the price’s current dip.

While Solana’s price has faced volatility, dropping from a high of $295 in early 2025, the onchain metrics suggest underlying strength. The stable NVT and increasing exchange outflows highlight robust network activity and investor accumulation, overshadowing short-term price bearishness. This presents a silver lining for investors, as the price drop could be seen as a buying opportunity. The SOL ecosystem continues to grow, with new projects and partnerships being announced regularly, suggesting that the long-term prospects for SOL remain strong despite the short-term price volatility.

Investors should consider the broader context and the potential for future growth when evaluating the current price drop. The bearish pattern for SOL could be invalidated if the price achieves a daily close above the $157 resistance level. However, Solana has shown a strong correlation with Bitcoin throughout the quarter. With Bitcoin potentially retesting support near the $100,000 level, increased sell-side pressure could lead to further correction for SOL. Therefore, it is crucial for investors to conduct their own research and make informed decisions based on the latest market developments and onchain data.