Solana (SOL) is approaching the historical support level of 118 USD, which often triggers price reversals and could open up a rally of about 16% if this level is maintained.
Although the trading volume has decreased significantly, the data related to the Solana ETF in the US and on-chain indicators such as TVL reflect the level of institutional interest and the influx of capital into the ecosystem is still increasing.
MAIN CONTENT
SOL has tested the 118 USD support area multiple times in history and often reversed upwards.
Cash flow into the spot Solana ETF and rising TVL indicate that investor confidence is improving.
The derivatives market leans towards long positions, but the larger trend is still under pressure below the 50-day EMA.
SOL is close to the 118 USD support, a critical point for the reversal scenario.
The 118 USD threshold is an important support area for SOL since April 2024, and if prices maintain above this region, the probability of a short-term reversal will be higher.
At the time of recording, SOL was trading around 124.50 USD, up 1.55% in 24 hours. However, market participation weakened as trading volume decreased by 40% to 3.67 billion USD, often reflecting traders' cautious state as prices approach support levels.
In this context, the 118 USD level is seen as the 'boundary' of the bullish argument: holding support reinforces recovery expectations, while losing this level could invalidate the reversal scenario.
Holding 118 USD may open up a target of 146 USD
If SOL maintains above 118 USD, the historical price reaction model shows that the rebound may be around 16%, corresponding to the area of 146 USD in the upcoming sessions.
On the daily frame, SOL has tested the 118 USD level more than ten times since April 2024, and each time a strong reversal has been recorded. Prices returning to this range often attract defensive buying, laying the foundation for a technical recovery.
The ADX indicator (measuring trend strength) is at 31.26, above the threshold of 25, indicating that the market has a clear directional trend. However, SOL remains below the 50-day EMA, implying that the overall trend is still leaning down and any increase (if it occurs) may still be a recovery in the larger trend.
Institutional cash flow through spot Solana ETF and rising TVL indicates improving confidence
ETF and on-chain data indicate that new capital is entering the Solana ecosystem, contributing to improved expectations despite general market uncertainty.
According to SoSoValue, the level of interest from Wall Street investors and institutions in the spot Solana ETF remains noteworthy, with cash flow recorded continuously since January 16.
Capital flow into ETFs is often understood as new money flowing into products tracking the underlying assets, thereby supporting demand for SOL in a suitable context.
In parallel, DeFiLlama recorded the Total Value Locked (TVL) of Solana increasing by 4.66% in a day, bringing the total TVL to 36.66 billion USD. Increasing TVL often reflects the amount of capital being 'locked' in DeFi protocols more, while also indicating that on-chain activity and ecosystem usage are strengthening.
Derivative data shows traders leaning towards long positions in the short term
In the derivatives market, clustered leverage shows that short-term sentiment is leaning towards increases, with larger long positions than shorts around key price levels.
According to CoinGlass, traders are 'overleveraged' around 121.3 USD (below) and 125.7 USD (above), making these two areas significant support/resistance levels for the day.
At these price levels, the market records approximately 157.18 million USD in long leveraged positions and 66.71 million USD in short leveraged positions. This difference indicates that expectations are leaning towards short-term increases, but it also means volatility could be strong if prices sweep through liquidation clusters.
Conclusion: The bullish argument depends on whether SOL holds the 118 USD level.
SOL is in a price range that has often formed technical bottoms; if it holds above 118 USD, the scenario of rising to 146 USD has historical price reaction backing.
In parallel with technical signals, the cash flow data through spot Solana ETF and rising TVL reinforces the on-chain confidence picture. However, the fact that SOL remains below the 50-day EMA reminds that the larger trend may not have fully reversed, making the 118 USD level continue to be an important risk management point.
Frequently Asked Questions
Why is the 118 USD level important for Solana (SOL)?
118 USD is the support level that has been active since April 2024 and has been tested by SOL more than ten times. Historically, each time this level is reached, SOL usually reverses strongly, making it a key point to evaluate the current reversal scenario.
If SOL holds above 118 USD, what price target is mentioned?
If SOL maintains above 118 USD, the mentioned scenario is that prices could increase by around 16% and head towards the area of approximately 146 USD in the coming days. This argument will weaken if SOL fails to hold 118 USD.
What does a 40% drop in trading volume indicate?
The volume decreased by 40% to 3.67 billion USD, indicating lower market participation and increased cautious sentiment as prices are near important support levels. This may cause volatility to depend more on liquidity/leverage clusters.
What does the cash flow into the spot Solana ETF and rising TVL mean?
Cash flow into the spot Solana ETF (according to SoSoValue) suggests new capital is participating through the fund channel, while TVL increasing to 36.66 billion USD indicates that capital and activity in the Solana ecosystem are stronger, often interpreted as improved on-chain confidence.
What do ADX 31.26 and SOL below the 50-day EMA say about the trend?
ADX 31.26 (above 25) indicates that the current trend has directional strength. However, SOL is still below the 50-day EMA, meaning the overall trend may still be in a down phase, and any increase (if it occurs) may be a recovery rather than a long-term reversal.
Source: https://tintucbitcoin.com/trader-solana-long-sol-sap-but-pha/
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