Solana News Today: Solana Breaks Key Support as Bearish Patterns Intensify Downtrend Risks

Solana's price has recently shown signs of a potential bearish shift, with technical indicators suggesting a possible correction in the months ahead. Traders and analysts are closely watching key support and resistance levels as the network's price forms a double top pattern on the weekly chart. The asset is currently testing the $120 support level, which has been a crucial floor for much of this year.

Network activity metrics, including total value locked (TVL) and decentralized exchange (DEX) volumes, have also declined, signaling reduced investor interest in the ecosystem. Solana spot ETF inflows have also weakened, with recent weekly data showing only $13.1 million in inflows compared to much higher figures in early December. This slowdown raises questions about the token's near-term appeal.

Meanwhile, technical analysts are highlighting the formation of a bearish double top pattern, which could signal a broader decline in the coming weeks or months. A breakdown below the $120 level could send the price toward the $95 level, based on the pattern's historical implications and current momentum indicators.

Why the Standoff Happened

The current price standoff is driven by a combination of technical and on-chain factors. Solana's price has formed a double top pattern on the weekly chart, with two distinct peaks separated by a trough. Such a pattern is a bearish reversal signal in technical analysis, especially when confirmed by a breakdown below the neckline. Momentum indicators like the MACD and RSI have also been trending downward, reinforcing the bearish sentiment.

On-chain metrics like TVL and protocol fees have dropped significantly from their highs earlier in the year. TVL has fallen from $35.1 billion to $23.8 billion, while protocol fees have decreased from $31 million to just $8 million. These trends suggest that user activity on the network has weakened, which in turn could be reducing the token's appeal to investors. The drop in TVL and fees indicates that fewer capital flows are being directed into Solana-based DeFi protocols, which could limit future growth and price appreciation.

What Analysts Are Watching

Market analysts are closely monitoring several key levels that could determine Solana's near-term trajectory. The $120 support level has been a critical floor for the price in 2025, and a confirmed breakdown could accelerate the downtrend toward $95 or lower. On the other hand, a sharp rebound above $155, which aligns with the 50% Fibonacci retracement level, could invalidate the bearish setup and trigger a potential recovery.

Some analysts have also identified a head-and-shoulders pattern on higher timeframes, with the neckline near $105. If the price breaks below this level, it could open the door to a deeper correction in the $75–$51 range, extending well into mid-2026. Others are watching for a potential rebound in January 2026, citing historical trends where the asset has historically posted strong gains following a December pullback. This "red December, green January" pattern has shown consistency in past years, including 2022–2023 and 2024–2025, with SOL bouncing after sharp declines.

Risks to the Outlook

Despite the bearish signals, there are also factors that suggest Solana could stabilize or even rebound in the coming months. ETF inflows, though currently weak, have remained positive overall, with cumulative inflows hitting $755.77 million since the launch of spot Solana ETFs. This indicates that institutional demand has not entirely disappeared and could provide a floor for the price if the market conditions improve.

However, the current inflows are seen as selective rather than broad, with investors favoring liquid and well-known tokens like Solana and XRP over more speculative assets. B2BinPay's analytics team notes that this selective buying pattern is more about risk management than a sign of a full-blown altseason. They caution that the inflows should not be interpreted as a major bullish signal but rather as a sign of cautious optimism.

Derivatives positioning also shows a mixed picture, with net short positions dominating on platforms like Hyperliquid. At the same time, some groups, including smart money and public figures, are slowly opening long positions in anticipation of a potential January 2026 rally. This suggests that while the immediate outlook is cautious, there are still expectations of a seasonal rebound.

What This Means for Investors

Investors are being advised to remain cautious and to monitor key price levels and technical indicators closely. If Solana continues to consolidate near $120, it could either defend the level and trigger a rebound or break below it and accelerate the downtrend. A daily close above $129 would signal renewed bullish momentum and could open the door to a rally toward $150 and beyond. However, any attempt to reclaim higher ground must first overcome the $150 level, which has historically served as a major resistance.

Long-term investors are also looking at the 200-week moving average as a potential support level. Solana's price is currently testing this zone, and a sustained hold above it could signal the start of a new base-building phase. However, failure to hold this level would significantly weaken the long-term bullish case and could delay any meaningful recovery until mid-2026 or later.

In the broader context, Solana's future depends on its ability to expand its DeFi ecosystem, improve network stability, and attract institutional adoption. While the bearish technical pattern and weak on-chain metrics are concerning in the short term, the network's fundamentals remain strong, with DEX volumes and stablecoin adoption continuing to grow. The coming months will be critical in determining whether Solana can regain its momentum or if it will face a prolonged correction.