Solana (SOL) is experiencing a period of conflicting signals, with robust network adoption clashing with technical indicators suggesting a potential price correction. Despite a significant surge in new users, on-chain data reveals a shift in holder behavior that could pressure prices in the near term.
Network adoption has skyrocketed, with the Solana blockchain adding more than 8 million new addresses in a single 24-hour period earlier in January. This influx of new participants, driven by DeFi activity, memecoins, and high-throughput applications, signals substantial demand and boosts network liquidity.
However, macro momentum is showing signs of strain. Data from Glassnode indicates that buying pressure from long-term SOL holders has weakened. This has allowed selling pressure from existing holders to begin dominating, potentially offsetting the positive impact of new capital inflows. When legacy supply outweighs new demand, price weakness often follows.
Technically, SOL has formed an ascending wedge pattern, which is often a bearish continuation signal. At the time of writing, SOL trades near $144. A breakdown from this pattern could project a decline of approximately 9.5%, targeting the $129 level. Key support levels to watch are $136 and $130.
On the institutional front, a positive development has emerged to bolster network fundamentals. Coinbase Institutional, in collaboration with NASDAQ-listed firm Sharps Technology (STSS), has launched a validator on the Solana network. This move enhances network security and decentralization while signaling growing institutional confidence in Solana's infrastructure. Daily trading volume remains high at over $2.25 billion, with SOL holding above the critical $140 support zone.
The immediate price outlook hinges on key levels. A confirmed breakdown below support risks a move toward $136 and $130. Conversely, a rebound from the wedge's lower trendline and a move above resistance near $145.47 could invalidate the bearish setup and propel SOL toward targets of $148.82 and $151.73.
