Solana makes another recovery attempt
Solana (SOL) has recently returned to the spotlight as signs of renewed institutional interest collide with renewed market turbulence, leaving the path forward for SOL uncertain but closely watched.
According to recent data, Solana investment funds netted about $101.7 million of inflows in November, evidence that institutional investors are still backing SOL even amid a broader altcoin slump.
This influx may help to explain a short-term rebound in SOL’s price: Solana climbed above $140.00, gaining more than 10% in a 24-hour window as news that major asset managers – including Vanguard – are offering crypto exchange-traded funds with exposure to SOL boosted investor sentiment.
The sudden bounce has reignited optimism among some traders that SOL could attempt a breakout, especially if demand for derivatives continues to rise.
Despite this surge higher, the past week has also revealed cracks in the rally. SOL recently came under selling pressure, extending a string of bearish daily candles, and slipped to around $122.00, testing critical support levels – twice.
Market-wide risk-off sentiment and waning appetite in derivatives markets contributed to a sharp decline in open interest and a negative funding rate, signalling that many traders are stepping back from leveraged bets.
Underlying these price swings is a stark shift in market structure: nearly 80% of Solana’s circulating supply is now held at a loss, underscoring how deeply many holdings are underwater after the broader 2025 drawdown.
That heavy loss base may weigh on sentiment, especially if investors begin cutting positions to salvage value – a dynamic that could intensify volatility if macro conditions worsen.
Still, there is also a bullish narrative taking shape. Some analysts argue that institutional flows into SOL funds, coupled with long-term confidence in Solana’s high-throughput blockchain infrastructure and growing adoption across DeFi and Web3 applications, may lay a foundation for a rebound if risk sentiment recovers.
In summary, the last few weeks have underscored Solana’s fragile position – teetering between a tentative rebound driven by institutional flows and renewed pressure from risk-off dynamics and heavy holder losses.
For SOL to stabilise and resume a meaningful uptrend, it will likely require a sustained return of investor confidence, improved market liquidity, and a broader revival in appetite for risk assets. Until then, volatility remains the name of the game for Solana’s next moves.
Solana bullish scenario:
This week’s 11% surge from SOL’s early December $123.11 low has the 20-to-26 November highs at $144.65-to-$144.75 in its sights. A daily chart close above this resistance zone would likely engage the 11 November peak at $171.89.
In this scenario the 200-day simple moving average (SMA) at $177.95 may then also be reached.
For the bulls to be fully in control, a rise and daily chart close above the early November peak at $189.07 should ideally be seen.
Solana bearish scenario:
Despite its recent recovery, SOL remains in a medium-term downtrend, even if it takes out the 20-to-26 November highs at $144.65-to-$144.75. The short-term trend would then turn bullish but for the medium-term trend to do the same, a daily chart close above the 11 November high at $171.89 needs to occur.
While remaining below the $144.65-to-$144.75 resistance area, the risk of revisiting the key $123.11-to-$121.66 support zone remains in play.