Solana Faces Potential $120 Decline Amid Bearish Patterns, While Onchain Data Suggests Long-Term Resilience

• Solana (SOL) faces a potential price correction to $120 amid bearish technical signals, yet strong onchain metrics suggest resilient fundamentals.

• The head-and-shoulders pattern on SOL’s daily chart indicates a possible downturn, but network activity and investor behavior reveal sustained confidence.

• According to COINOTAG, “SOL’s declining NVT ratio and consistent exchange outflows underscore long-term value despite near-term price volatility.”

Solana’s price may dip to $120 following bearish chart patterns, but robust onchain data highlights strong network usage and investor accumulation.

Technical Analysis Signals Bearish Pressure on Solana Price

Solana’s daily chart reveals a classic head-and-shoulders pattern, a widely recognized bearish reversal indicator. The neckline, positioned near $140, acts as a critical support level. A decisive breakdown below this point, especially if accompanied by increased trading volume, could trigger a further decline toward the $120 target zone. This price level aligns with a significant liquidity area, suggesting it may attract buyer interest and potentially stabilize the price.

Moreover, the formation of a bearish engulfing candle reinforces the negative momentum, signaling sellers’ dominance in the short term. However, the bearish scenario could be invalidated if SOL manages a daily close above the $157 resistance, which would indicate renewed buying strength and a possible reversal of the downtrend.

Correlation with Bitcoin and Market Sentiment Impact

Solana’s price movements have shown a strong correlation with Bitcoin’s performance throughout the recent quarter. Given Bitcoin’s potential retest of support near the $100,000 mark, any increased sell-side pressure on BTC could cascade into SOL, amplifying its downward trajectory. This interdependence highlights the importance of monitoring broader market trends when assessing Solana’s price outlook.

Onchain Metrics Reveal Underlying Strength Amid Price Volatility

Despite bearish technical signals, Solana’s onchain data presents a more optimistic narrative. The Network Value to Transactions (NVT) ratio, a key metric assessing network usage relative to market capitalization, has fallen below 10—the lowest since February 2025. This decline indicates heightened transactional activity on the Solana blockchain, suggesting robust utility and engagement despite price fluctuations.

Additionally, the Exchange Net Position Change data from Glassnode shows a sustained trend of SOL withdrawals from exchanges, a behavior typically associated with investor accumulation and confidence. Although recent weeks have seen a slight uptick in SOL deposits back to exchanges, this movement corresponds with the current price dip and does not negate the broader accumulation trend.

Investor Behavior and Network Activity as Indicators of Long-Term Potential

The persistent net outflow of SOL tokens from exchanges, peaking at -4.6 million SOL on May 28, reflects a strategic shift by holders toward long-term storage rather than immediate selling. This accumulation pattern, combined with stable network usage metrics, suggests that investors remain bullish on Solana’s future prospects despite short-term price corrections.

Market Outlook and Strategic Considerations for Traders

Traders should closely monitor the $140 neckline support and the $157 resistance level to gauge the next directional move for SOL. The interplay between technical patterns and onchain fundamentals provides a comprehensive framework for decision-making. While the head-and-shoulders pattern warns of potential downside, the strong network activity and investor behavior offer a counterbalance that could limit losses and set the stage for recovery.

Conclusion

Solana’s near-term price action is shaped by bearish technical patterns pointing toward a possible decline to $120. However, robust onchain data—including a low NVT ratio and sustained token accumulation—indicates resilient network fundamentals and investor confidence. Market participants should consider both technical signals and blockchain metrics to navigate SOL’s evolving landscape effectively.