Solana (SOL): Is the B-Wave Pullback a Strategic Entry Point Amid Key Support at $134?

The Solana (SOL) price action in late December 2025 has drawn intense scrutiny from traders and analysts, with the $134–$138 support zone emerging as a critical battleground for the asset's near-term trajectory. This level, aligned with Fibonacci retracements and horizontal support, represents a pivotal test of the bullish Elliott Wave structure that has defined Solana's year-long rally. If buyers can defend this zone, the path to $150 and beyond may open, but a breakdown could expose deeper vulnerabilities. Below, we dissect the technical and on-chain signals to determine whether the B-wave pullback at $134 offers a strategic entry point.

Technical Validation: Elliott Wave and Fibonacci Confluence

Solana's price action has followed a textbook Elliott Wave sequence, characterized by a five-wave impulse followed by a corrective ABC pattern according to MEXC analysis. The current pullback aligns with wave B of this correction, with wave C potentially in play to target $142–$150 as MEXC reports. The $134 level is particularly significant as it coincides with the 61.8% Fibonacci retracement of the prior uptrend and a horizontal support zone formed over multiple months according to technical analysis

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A broader technical setup reinforces this narrative. Solana is forming a four-year cup-and-handle pattern, with the $260.83 neckline as a critical breakout threshold. A decisive breach above this level could signal a shift in market control from sellers to buyers, unlocking a potential move toward $506 based on the pattern's measured price target. Meanwhile, the 100-day moving average is rising, suggesting that accumulation is underway and liquidity is improving.

On-Chain Signals: Accumulation and Institutional ConfidenceOn-chain data provides further validation of bullish continuation potential. Over 21,000 new SOL coins were deployed on the network in the last 24 hours, with trading volume surging past $5.4 billion- a sign of robust network participation and pre-breakout accumulation. Exchange outflows have also accelerated, with $8.77 million in SOL moving into wallets in mid-December 2025, indicating investors are hoarding the asset rather than selling.

Institutional confidence is another key driver. U.S.-listed Solana ETFs attracted over $600 million in net inflows in late 2025, contrasting with outflows from Bitcoin and Ethereum ETFs during the same period according to CoinDesk. By early January 2026, these ETFs' total net assets surpassed $1 billion, reflecting renewed demand for the asset. Meanwhile, whale accumulation activity has persisted despite a 46% price decline over the previous quarter, with large wallets purchasing significant amounts of SOL.

Risk Considerations: NVT Ratio and Liquidity Pressures

While the bullish case is compelling, risks remain. Solana's Network Value to Transactions (NVT) ratio has reached a seven-month high, indicating that market value has outpaced transaction volume-a classic bearish divergence. This suggests overvaluation and potential for a correction if buyers fail to defend key supports.

Additionally, the $129 level has shifted to potential resistance, and a failure to retest and reclaim this level could trigger further downward pressure. A clean break below $125 would expose Solana to a test of the $120 psychological level, with broader support at $117 looming.

Strategic Entry Point: Balancing Technical and On-Chain Signals

The confluence of technical and on-chain signals suggests that the $134 support zone is a high-probability area for a bullish reversal. The Elliott Wave structure, Fibonacci levels, and cup-and-handle pattern all point to a resumption of the uptrend if buyers hold this zone. On-chain metrics, including accumulation patterns, ETF inflows, and whale activity, further reinforce this narrative.

However, traders must remain cautious. The NVT ratio's divergence and liquidity pressures highlight the fragility of the current setup. A strategic entry at $134 should be accompanied by tight stop-loss placement below $125 to mitigate downside risk. For those with a longer-term horizon, the $134–$138 zone offers a compelling opportunity to capitalize on Solana's institutional adoption and ecosystem growth, particularly with the Firedancer validator upgrade and RWA tokenization surging.

Conclusion

Solana's $134 support level represents a critical inflection point for the asset. While the technical and on-chain signals lean bullish, the risks of a breakdown remain. Investors who can stomach short-term volatility and align with the broader institutional narrative may find this pullback a strategic entry point. As always, prudent risk management and continuous monitoring of on-chain metrics will be essential in navigating the next phase of Solana's journey.