Solana (SOL) may fall to $120 but there is still hope

Solana (SOL) shows bearish prospects on the daily chart after forming a bearish engulfing candle pattern. If this trend continues, the price of SOL could fall to $120.

On the 1-day timeframe, SOL is forming a head and shoulders pattern, a bearish reversal signal. A break below the neckline at $140, accompanied by an increase in trading volume, could confirm the continuation of the downtrend.

SOL 1-day chart | Source: TradingViewThe bearish target from the head and shoulders pattern is around $126, supported by the nearest liquidity zone. However, the demand zone on the daily frame is defined by the order block ranging from $95 to $120 (yellow color) and may be tested in the coming weeks.

The bearish pattern of SOL will be invalidated if the daily closing price exceeds the resistance level of 157 dollars. However, Solana has shown a strong correlation with Bitcoin throughout the past quarter. If BTC returns to retest the support area around the 100,000 dollars mark, increased selling pressure may lead to a deeper correction for SOL.

On-chain data supports Solana's recovery potential

Although the price outlook is somewhat bearish, Solana's on-chain data still shows a positive picture. According to Glassnode, the Network Value to Transactions Ratio (NVT) has fallen below 10 – the lowest level since February 2025. Thus, the strong network usage relative to the current market value is an important indicator of long-term potential, despite the fact that SOL price remains volatile below the $150 threshold.

NVT ratio of Solana | Source: GlassnodeAdditionally, the chart of Net Position Change on exchanges shows that SOL has been continuously withdrawn from exchanges recently — however, this trend has begun to reverse as the amount of SOL being transferred back to exchanges shows signs of increasing, but the indicators have not yet returned to the green zone. This reflects the growing confidence of investors, as holding SOL off exchanges is often seen as a sign of accumulation in anticipation of future profits.

Data shows a significant net withdrawal, peaking at -4.6 million SOL on May 28, followed by a recent increase in deposits, consistent with the current bearish trend of SOL.

Solana: Change in net position on the exchange | Source: GlassnodeAlthough the price of SOL has experienced significant fluctuations, falling from a peak of 295 dollars earlier in 2025, on-chain metrics still indicate strong underlying strength. The stable NVT ratio along with increasing withdrawals from the exchange signals robust network activity and an accumulation trend from investors, overshadowing the short-term bearish sentiment regarding the price.

Dinh Dinh