I’ve been watching the crypto markets for years now, and every time a high-flyer like Solana starts showing cracks, it gets my attention. Right now, as we close out 2025, SOL is trading around $127, and honestly, it feels like the momentum has shifted. What was once unstoppable growth seems to be hitting some serious resistance. Is this just a healthy pullback, or the start of something more painful?
Think about it—Solana exploded onto the scene with its blazing-fast transactions and low fees, drawing in hordes of developers and users. But markets don’t go up forever. Lately, some worrying signs have popped up that could signal tougher times ahead for the token.
Warning Signs in Solana’s Price Action
One of the biggest red flags right now is the technical setup on the charts. Over the past year or so, Solana has traced out what looks a lot like a classic double top pattern on the higher timeframes. You know the one—two peaks at similar highs, with a dip in between, and then pressure building on the support line below.
In Solana’s case, those peaks came earlier in 2025 when prices pushed toward all-time highs around $290-295. Since then, it’s been a steady grind lower, and now we’re testing that crucial neckline around the $120 mark. If that gives way, well, history shows these patterns can lead to sharp declines.
A confirmed break below the neckline often opens the door to further downside, sometimes measuring the height of the pattern added to the breakdown point.
I’ve seen this play out before in other assets. It’s not always doom and gloom, but when momentum indicators are flashing weakness too—like declining RSI or bearish MACD crossovers—it adds weight to the bearish case.
How the Double Top Pattern Forms and What It Means
Double tops aren’t rare in crypto; they’re reversal signals after extended uptrends. For Solana, the first top formed amid huge hype around meme coins and DeFi explosions. The second came as institutions piled in via new ETFs. But both times, buyers couldn’t push higher, and sellers stepped in aggressively.
Right now, with price flirting dangerously close to that $120 support, a weekly close below could confirm the pattern. Potential targets? Some analysts point toward $95 or even lower, revisiting levels from earlier in the year. Of course, crypto being crypto, a sudden rebound isn’t off the table—but the odds seem tilted toward caution.
- Two similar highs with failing upside momentum
- Neckline support under threat
- Bearish confirmation on breakdown
- Often leads to measured moves lower
Perhaps the most interesting aspect is how this ties into broader market sentiment. When patterns like this align with weakening fundamentals, that’s when things can accelerate.
Dropping TVL: A Sign of Fading Network Activity?
Beyond the charts, on-chain metrics are painting a similar picture. Total value locked—or TVL—in Solana’s DeFi protocols has taken a hit. From peaks above $13 billion mid-year, it’s slid to around $8-9 billion lately. That’s a meaningful drop, even if the ecosystem remains robust compared to past cycles.
Why does TVL matter so much? It’s basically a proxy for how much capital is actively working in the network—lending, borrowing, staking, trading. When it falls, it often means users are pulling back, either de-risking or rotating elsewhere.
Network fees have followed suit, dipping noticeably. Less activity means fewer transactions, which translates to lower demand for SOL to pay those fees. Add in declining active addresses and DEX volumes cooling off from meme coin frenzy peaks, and you get a network that’s still alive but not thriving like before.
Healthy blockchains need sustained user engagement. When metrics trend lower for months, it can pressure the native token.
– Common observation among crypto analysts
In my experience, these kinds of slowdowns can create vicious cycles: less activity leads to lower token utility, which dampens price, which further reduces enthusiasm. Solana isn’t alone here—many chains go through phases like this after big runs.
ETF Inflows Slowing: Institutional Enthusiasm Waning?
One of the big stories for Solana in 2025 was the launch of spot ETFs. They brought in legitimate institutional money, helping legitimize the asset. Cumulative inflows have been impressive, crossing hundreds of millions.
But here’s the catch: the pace has slowed. Early weeks saw strong numbers, but recent flows are more modest—or even mixed with occasional outflows. When big players hesitate, it can signal shifting priorities, perhaps toward Bitcoin or other opportunities.
Don’t get me wrong, the existence of these ETFs is still a huge win long-term. They open doors for traditional investors wary of direct custody. But short-term, cooling inflows remove a key buying force that helped support price during dips.
- Initial surge post-launch drove optimism
- Recent weeks show deceleration
- Could reflect broader risk-off in alts
- Still positive for adoption overall
It’s worth noting that treasury holdings and staking by big entities continue to grow in some areas. Close to 5% of supply locked in institutional-like vehicles. That provides a floor, but it might not prevent near-term volatility.
What Could Trigger a Deeper Decline?
If the bearish setup plays out, several factors could amplify the move. Broader market weakness—say, if Bitcoin corrects—would drag alts like Solana harder, given its beta.
Meme coin fatigue is real too. Solana became synonymous with wild pumps in tokens like those on pump.fun platforms, but volumes there have cratered from peaks. That retail frenzy fueled a lot of the hype.
Any network hiccups, though rarer now, could spook investors. Solana’s come a long way on reliability, but perception lingers.
The Bullish Counterarguments: Reasons for Optimism
To be fair, it’s not all doom. Solana’s fundamentals remain strong in many ways. Developer activity is still high, upgrades like better clients are rolling out, and real-world use cases—from payments to tokenized assets—are expanding.
Stablecoin supply on the chain has ballooned, signaling liquidity for future growth. And those ETFs? They’re here to stay, potentially attracting more as awareness builds.
A break above key resistance—say, reclaiming $155 or higher—could invalidate the bearish pattern and spark a fresh leg up. Crypto loves to surprise, after all.
Pullbacks after big runs are normal. The question is whether the ecosystem keeps building through them.
I’ve found that the strongest projects use these periods to strengthen foundations. Solana has the tech edge; if activity rebounds, it could lead the next wave.
Key Levels to Watch Going Forward
For traders, here are the spots I’m eyeing:
- Support: $120 neckline—hold or break decides a lot
- Deeper support: $95-100 zone from prior lows
- Resistance: $155 for bullish invalidation
- Upside targets: Back toward $200+ on strength
Momentum shifts quickly in this space. One big announcement or macro shift, and sentiment flips.
Wrapping up, Solana’s at a crossroads. The risks of a breakdown are real—with that double top looming, TVL and activity cooling, and ETF momentum easing. But the long-term story hasn’t changed much: fast, cheap, scalable blockchain with a vibrant ecosystem.
Whether you’re holding, trading, or watching from the sidelines, these next weeks could be pivotal. Stay vigilant, manage risk, and remember—crypto rewards patience as much as conviction.
What do you think—bear trap or real trouble? The charts will tell soon enough.
