SOL Risks $120 Retest Despite Bullish Onchain Data

Key takeaway:

SOL (SOL) projects a bearish outlook on the daily chart after forming a bearish engulfing, and if the trend holds, SOL price could fall to $120.

On the 1-day time frame, SOL shows a head-and-shoulders pattern, which is a bearish reversal signal. A breakdown below its $140 neckline level, confirmed by a volume spike, could lead to a bearish continuation.

The downside target from the head-and-shoulders pattern is around $126, supported by the immediate liquidity zone. However, the daily demand zone is outlined by the order block between $95 and $120 (yellow box), which could be tested over the next few weeks. 

The bearish pattern for SOL could be invalidated if the price achieves a daily close above the $157 resistance level. However, Solana has shown a strong correlation with Bitcoin throughout the quarter. With BTC potentially retesting support near the $100,000 level, increased sell-side pressure could lead to further correction for SOL.

Related: SOL price rally to $200 brewing, but 3 key catalysts must happen first

Onchain data supports Solana recovery.

Despite a bearish outlook, onchain data for Solana continues to paint a bullish picture. According to Glassnode, the Network Value to Transactions Ratio (NVT) has dropped below 10, its lowest score since February 2025. This suggests strong network usage relative to its market value, a key indicator of long-term potential, despite SOL’s price fluctuating under $150. 

Additionally, the Exchange Net Position Change chart reveals consistent SOL withdrawals from exchanges, a trend that has recently begun to rise again (i.e., SOL is moving back into exchanges). This indicates growing investor confidence, as holding SOL off exchanges often signals accumulation for future gains. The data shows a significant net outflow, with peaks of -4.6 million SOL on May 28, followed by a recent uptick in deposits, which falls in line with the price’s current dip.

While Solana’s price has faced volatility, dropping from a high of $295 in early 2025, the onchain metrics suggest underlying strength. The stable NVT and increasing exchange outflows highlight robust network activity and investor accumulation, overshadowing short-term price bearishness. 

Related: Canada’s Sol Strategies files with SEC to list on the Nasdaq

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.