Solana (SOL) has recently exhibited price volatility, with potential for further decline, although on-chain data suggests underlying strength. Technical analysis of SOL's daily chart indicates a possible drop to $120, forming a bearish engulfing pattern. If this trend continues, SOL's price could decline further.
The one-day time frame reveals a head-and-shoulders pattern, typically a bearish reversal signal. A break below the $140 neckline, accompanied by a spike in volume, could confirm this bearish continuation. The downside target for this pattern is approximately $126, which aligns with an immediate liquidity zone. Furthermore, the daily demand zone, represented by the order block between $95 and $120, could be tested in the coming weeks.
However, a daily close above the $157 resistance level would invalidate this bearish pattern. Solana's price movements have shown a strong correlation with Bitcoin's performance throughout the quarter. If Bitcoin retests support near $100,000, increased selling pressure could exacerbate the correction for Solana.
Despite the bearish outlook, on-chain data presents a more optimistic perspective for Solana. Glassnode data reveals that the Network Value to Transactions Ratio (NVT) has fallen below 10, reaching its lowest point since February 2025. This low NVT ratio suggests robust network usage relative to its market value, indicating long-term potential despite price fluctuations.
Additionally, the Exchange Net Position Change chart shows consistent withdrawals of SOL from exchanges, a trend that has recently intensified. This suggests growing investor confidence, as holding SOL off exchanges often indicates a long-term investment strategy.
Several factors contribute to Solana's potential for recovery and future growth. The increasing odds of a spot Solana ETF approval have fueled market optimism. Polymarket data indicates a 91% probability of SEC approval for a spot Solana ETF by 2025. Major firms like VanEck, Grayscale, and Bitwise have already submitted filings, signaling strong institutional interest in Solana. Invesco and Galaxy Digital have also announced plans to launch a Solana ETF Trust in Delaware, further highlighting expanding institutional interest.
Solana's derivatives market also reflects strong activity, with futures open interest nearing all-time highs. Solana's total value locked (TVL) has risen to 56.8 million SOL ($9.1 billion), the highest level since June 2022. Daily active addresses on Solana have also increased, with leading DApps experiencing significant growth in unique wallets, reflecting increasing ecosystem engagement.
Looking ahead, Solana's outlook for 2025 depends on key catalysts, including ETF approval and the Firedancer upgrade, which aims to scale throughput to over 1 million daily transactions. Approval of a Solana ETF could unlock over $1.2 billion in inflows, driving renewed institutional interest. Technical analysis suggests that a sustained bullish momentum could push SOL into the $180 range, although potential resistance around $200 may lead to profit-taking. By August 2025, Solana could potentially reach the $260 to $270 range, driven by strong on-chain fundamentals and bullish investor sentiment.
Several experts have provided price predictions for Solana in 2025, with estimates ranging from $220 to $1,000. Factors such as ETF approval, technological upgrades, and growth in the DeFi ecosystem could drive Solana's price upward.
