Solana Approaches Critical Technical Juncture

Solana CRYPTO000SOL

As December 2025 draws to a close, Solana (SOL) is consolidating near the $130 price level. This period of relative stability, marked by modest short-term gains, masks a brewing technical conflict. The persistence of institutional accumulation amidst concerning chart patterns sets the stage for a decisive move in the coming weeks.

A significant divergence is emerging between market sentiment and the actions of major investors. While retail participants exhibit caution, institutional players continue to build positions. Treasury firms and exchange-traded funds (ETFs) now collectively hold nearly 5% of all SOL in circulation. This substantial stake, accumulated over several months, reflects a strategic, long-term commitment rather than short-term speculation.

Recent weekly ETF inflows totaled $13.1 million. Although this figure is more moderate compared to previous periods, it demonstrates consistent interest. The holding pattern of these large investors effectively reduces the circulating supply of SOL, which can help cushion downward pressure during volatile market phases.

On-Chain Metrics Reveal Underlying Network Health

A look beneath the price action presents a nuanced view of the Solana ecosystem's actual usage.

Total Value Locked (TVL): The value of assets committed to Solana's decentralized finance (DeFi) protocols currently stands at approximately $8.8 billion. This represents a notable decline from the network's peak TVL of around $13.2 billion, recorded in the first half of 2025. This reduction aligns with a broader sector-wide shift of capital into more defensive positions.

Protocol Revenue: Throughout December, fees generated across Solana's ecosystem reached about $15 million. Although below the speculative highs seen earlier in the year, this revenue indicates a stable baseline of activity driven by DeFi trading and stablecoin transactions. The network remains a central hub for decentralized exchange activity, supported by consistently high user engagement.

A Precarious Technical Setup

Monday's trading saw SOL priced near $129, registering a gain of roughly 3.5%. However, this minor recovery does not erase recent vulnerabilities. The cryptocurrency has tested the psychologically significant $120 support level multiple times in recent weeks.

Market technicians point to a weekly chart formation that resembles a double-top pattern, traditionally viewed as a bearish reversal signal. A sustained break below the $120 support could open the door for further declines toward $116, with a potential longer-term target near $95. Buyers are currently focused on defending this zone to prevent a deeper correction. The nearest major resistance level for any bullish reversal sits at $155.

The Path Forward into 2026

Solana finds itself at a crossroads as 2025 ends. Compelling technical warnings suggest the potential for further price depreciation, while substantial institutional ownership provides a foundational layer of support. The immediate trading sessions are critical. A successful defense of the $120 mark would keep the prospect of a rally toward $155 alive. Conversely, a decisive breakdown below this level could initiate a more pronounced corrective phase.