Solana's TD Sequential Buy Signal: A Strategic Entry Point Amid Market Volatility?

The cryptocurrency market remains a high-stakes arena, and Solana (SOL) has emerged as a focal point of both optimism and caution. As the asset trades near the critical $150 support level, a TD Sequential buy signal has ignited debate among traders and analysts. This indicator, historically associated with trend reversals, now aligns with on-chain metrics and institutional demand, suggesting a potential inflection point. However, structural bearish patterns and divergences in price action demand careful scrutiny. Let's dissect the technical and on-chain evidence to determine whether this is a strategic entry opportunity or a cautionary setup.

The TD Sequential Signal: A Historical Indicator of Reversal

The TD Sequential indicator, a technical tool developed by Tom DeMark, has gained prominence for identifying potential trend exhaustion points. As of November 2025, Solana's daily chart has triggered a "9" in the TD Sequential pattern-a signal that has historically preceded sharp price surges since early 2023. This setup is particularly significant as it coincides with Solana's consolidation near the $150 support zone, a level that has historically acted as a floor for rebounds.

Analysts like Ali Martinez have emphasized that the TD Sequential signal is not a standalone trigger but a confirmation tool when paired with other technical and on-chain factors. For instance, the RSI is currently in oversold territory, and the MACD shows early signs of a bullish crossover, suggesting that downward momentum may be waning. However, the price must stabilize above $150 to validate the signal, with a subsequent breakout above $165–$170 required to confirm a bullish reversal.

On-Chain Metrics: Strength Amid Weakness

While technical indicators provide directional guidance, on-chain data offers insight into the underlying health of the Solana ecosystem. According to Nansen, Solana has maintained robust network activity, with 17.2 million active addresses and 432 million transactions recorded in a single week. This level of engagement underscores the network's utility and resilience, even as price action remains volatile.

However, the Network Value to Transaction (NVT) ratio-a metric that compares market capitalization to daily transaction volume-has reached a four-month high, signaling a growing disconnect between valuation and usage. A high NVT ratio often indicates overvaluation, raising concerns about a potential correction. That said, liquidity clusters identified by on-chain analysts suggest heavy absorption near the $145–$150 range, hinting at a possible bottoming process. If buyers defend this zone, the NVT ratio could normalize as volume increases, aligning fundamentals with price action.

Institutional Demand and ETF Inflows: A Double-Edged Sword

Institutional interest in Solana remains a key driver of its long-term narrative. ETFs like Bitwise's BSOL and Grayscale's GSOL have attracted $605 million in net inflows in recent weeks, despite the asset's price weakness. This divergence between ETF flows and price performance highlights the dominance of technical factors in the near term but also underscores growing confidence in Solana's fundamentals.

Nevertheless, the recent $8.2 million outflow from Solana ETFs-a first since their launch-signals caution among some institutional players. While repositioning by major funds has offset some of this outflow, the broader market's reliance on Bitcoin's performance and macroeconomic sentiment means Solana's trajectory remains intertwined with broader crypto cycles.

Risks and Challenges: Bearish Scenarios to Monitor

Despite the bullish signals, several risks could derail Solana's recovery. A critical head-and-shoulders pattern is forming on the price chart, with the neckline at $120–$125. A sustained break below this level would confirm a bearish scenario, exposing further downside toward $118–$125 and even $81–$50 based on Fibonacci projections. Additionally, the 50-day and 200-day EMAs are nearing a potential Death Cross-a bearish signal that could accelerate the decline if confirmed.

Volume patterns also raise concerns. While the TD Sequential signal suggests buyer participation, recent price action has shown compressed volume and lower highs, indicating buyer fatigue. Without a surge in volume to confirm a breakout above $150, any rallies may remain speculative and short-lived.

Conclusion: A Calculated Opportunity Amid Uncertainty

Solana's TD Sequential buy signal, combined with strong on-chain activity and institutional demand, presents a compelling case for a potential trend reversal. However, the risks of a breakdown below $150 and the structural bearish patterns cannot be ignored. For investors, this setup represents a calculated opportunity rather than a guaranteed entry.

Key levels to monitor include the $150 support zone, the $165–$170 resistance cluster, and the $120–$125 neckline of the head-and-shoulders pattern. A successful defense of $150 and a breakout above $165 could position Solana for a short-term rally toward $180–$190, while a breakdown below $150 would likely trigger a deeper correction. Given the current volatility, a disciplined approach-balancing technical analysis with on-chain fundamentals-is essential for navigating this high-stakes scenario.