Solana Price Faces Crash Risk Despite 8 Million New Investors

Solana (SOL) is trading above $146 as of 2026-01-17, supported by growing retail and institutional interest. The price has rebounded from consolidation above the $120 support level. Institutional demand is evident through Solana ETFs, which recorded $6 million in inflows on January 16.

The derivatives market for Solana is showing increased activity, with open interest rising to $8.8 billion on January 17, the highest level since early November. This surge indicates stronger retail and trader positioning for a potential short-term breakout.

Technical indicators like the RSI and MACD suggest a bullish trend. The RSI is at 68, signaling accumulating bullish momentum, while the MACD remains above the signal line. A continuation above the 100-day EMA at $149 would confirm the uptrend.

Why Did This Happen?

The price recovery is being supported by a mix of factors, including ETF inflows and retail demand. Solana's cumulative ETF inflow volume stands at approximately $834 million with net assets of $1.18 billion. The growth in ETF demand points to increased institutional adoption and potential for an extended uptrend.

Derivatives market activity is another sign of investor confidence. The futures open interest, representing the notional value of outstanding contracts, rose from $7.38 billion on January 1 to $8.8 billion on January 17. This increase reflects positioning for potential price movement as the market anticipates a breakout.

How Did Markets React?

Despite the positive momentum, technical analysis also highlights risks. Solana is forming an ascending wedge pattern, which historically precedes price pullbacks. A breakdown from the wedge could lead to a potential 9.5% decline, bringing the price down to $129.

On-chain data reveals conflicting signals. While the number of new addresses on Solana has surged— peaking with over 8 million new addresses in a 24-hour period—existing holders are exerting downward pressure. Exchange position change data shows weaker buying momentum from long-term participants, which could lead to selling dominance.

The financial risk management software market is also seeing growth as institutions and corporations seek tools to handle increased regulatory and market volatility. This market is projected to reach $12.91 billion by 2033, growing at a CAGR of 15.01%.

What Are Analysts Watching Next?

Analysts are keeping a close eye on key technical levels. A close above $149 would confirm the bullish thesis, while a drop below $138 could expose Solana to further corrections. The 200-day EMA at $160 remains a critical resistance level. A failure to hold this level could trigger profit-taking and volatility.

Retail and institutional investors are also monitoring the ETF landscape. The performance of Solana ETFs will provide insight into continued institutional demand, which could influence broader market sentiment and price direction.

The derivatives market's open interest is a key factor to watch in the short term. A sharp decline in open interest could indicate waning interest or increased profit-taking. On the other hand, a sustained increase in leverage could amplify both upward and downward price swings.

The financial risk management software market is expected to continue growing due to stricter compliance and cybersecurity demands. This expansion reflects broader trends in risk management across industries and could influence Solana's institutional adoption if financial institutions incorporate risk tools for crypto exposure.