Is Solana (SOL) Entering a New Bearish Phase Amid Fading Accumulation and Deteriorating Holder Confidence?

The Solana (SOL) ecosystem has long been a focal point of innovation in the blockchain space, but as 2025 draws to a close, the asset faces mounting scrutiny. With price volatility intensifying and on-chain metrics signaling fragility, investors are asking: Is Solana entering a new bearish phase? This analysis examines the interplay of short-term technical indicators and on-chain sentiment to assess the risks and opportunities for SOL in the near term.

Short-Term Technical Fragility: A Delicate Balance

Solana's price trajectory in late 2025 has been defined by a tug-of-war between critical support and resistance levels. As of November 2025, SOL was trading near $120, a level that has become a psychological battleground. Technical analysts have identified this range as a pivotal support zone, with a breakdown below $120 potentially triggering a cascade to $100–$90. Conversely, a breakout above $134–$135 could reignite bullish momentum, with $145 and $172 as subsequent targets.

The recent rally to $140 in late November-driven by sustained inflows into Solana-based ETFs-offered a temporary reprieve. Bitwise's Solana ETF recorded 33 consecutive days of positive inflows following the Breakpoint 2025 event. However, this optimism is tempered by bearish patterns. A "death cross" signal emerged on the hourly chart, where the 9-day and 26-day moving averages crossed, amplifying downside risks. Meanwhile, the price remains below key moving averages, reinforcing a bearish trend.

Bullish technical indicators suggest potential for a rebound toward $260. Yet these patterns hinge on Solana's ability to hold critical levels. Failure to do so could cement a prolonged bearish phase.

On-Chain Sentiment: A Loss-Dominant Network?

On-chain metrics paint a nuanced but concerning picture. The MVRV ratio has remained below 1 since mid-November, indicating that more holders are selling at a loss than securing profits. This loss-dominant phase has contracted liquidity and heightened price reactivity. Compounding this, network activity plummeted by 97% in Q4 2025, with monthly active traders dropping from over 30 million to fewer than 1 million. This collapse was largely attributed to the waning popularity of meme coins, which had previously driven speculative demand.

Despite these challenges, Solana's infrastructure remains robust. The NVT ratio has diverged, highlighting a growing disconnect between market valuation and network usage. Meanwhile, Chaikin Money Flow suggests mild accumulation, though it pales in comparison to historical inflows. Institutional confidence, however, persists. The launch of the Franklin Templeton Solana Spot ETF and sustained inflows into products like Bitwise's BSOL-capturing 89% of Solana ETF inflows-signal long-term optimism.

Institutional Optimism vs. Retail Retreat

The Q4 2025 performance of Solana was its worst in 2025, with a 39.1% decline. Yet institutional investors have continued to pour capital into the asset. ETF inflows reached $476 million over 19 consecutive days, even as broader crypto markets faltered. This divergence underscores a strategic shift: while retail participation has waned, institutions are positioning Solana as a cornerstone of financial infrastructure.

Validator diversity, developer activity, and DeFi TVL (total value locked) remain resilient, with TVL exceeding $5 billion. Additionally, Solana's role in stablecoin settlements-bolstered by partnerships like Visa's integration-highlights its utility beyond speculative trading. However, high interest rates and regulatory uncertainty have dampened speculative demand, with many retail investors expressing regret over trades and advocating for more disciplined strategies.

Conclusion: A Pivotal Inflection Point

Solana's near-term outlook is a study in contrasts. Technically, the asset is perched on a knife's edge, with $120–$125 as a make-or-break support range. On-chain data reveals a loss-dominant network, yet institutional adoption and infrastructure upgrades suggest long-term resilience. The coming months will hinge on whether Solana can stabilize at key levels and rekindle retail confidence.

For now, investors must weigh the risks of a breakdown below $120 against the potential for a rebound fueled by institutional inflows and ecosystem growth. While the bearish case is compelling, Solana's fundamentals and technical upgrades position it as a potential inflection point for 2026-if it can weather the storm.