Solana Price Drop to $120 Looms, But On-Chain Data Signals Hope

The current state of the Solana price is presenting a mixed picture for investors. While technical indicators on the daily chart suggest a potential downside move, underlying on-chain data points towards robust fundamentals and long-term conviction among holders. Understanding this duality is key for anyone navigating the volatile crypto market.

Why is Solana Price Facing Downside Pressure?

Looking at the daily chart for SOL, a prominent bearish pattern has emerged: the head-and-shoulders formation. This setup typically signals a potential trend reversal from bullish to bearish. A critical level to watch is the neckline around $140. If SOL price breaks decisively below this neckline, accompanied by increased trading volume, it would confirm the pattern and could trigger a significant downward movement.

The technical target derived from this head-and-shoulders pattern sits near the $126 mark. This level aligns with an immediate liquidity zone, suggesting it could attract some initial buying interest. However, the more substantial demand zone, represented by a key order block, lies between $95 and $120. This range could be tested if the bearish momentum persists over the coming weeks.

It’s also important to consider external factors influencing the crypto market. Solana has historically shown a strong correlation with Bitcoin (BTC). Should Bitcoin experience further correction or retest lower support levels, this could add significant sell-side pressure on SOL, reinforcing the potential for a drop towards the $120 area.

What Does On-Chain Data Reveal About SOL Price?

Despite the cautionary technical outlook, a deeper dive into on-chain data for Solana reveals a compellingly bullish narrative. These metrics provide insights into network usage, investor behavior, and underlying demand, often painting a different picture than short-term price action.

• Network Value to Transactions (NVT) Ratio: According to data from Glassnode, Solana’s NVT ratio has recently dropped below 10, reaching its lowest point since early 2025. The NVT ratio compares the network’s market capitalization to the value of transactions processed on the blockchain. A low NVT suggests that the network’s value is relatively low compared to its utility and transaction volume. This indicates strong network usage relative to its current market value, which is often considered a bullish signal for long-term growth potential, even as Solana price fluctuates below $150.
• Exchange Net Position Change: Another key on-chain metric is the Exchange Net Position Change. This tracks the net flow of SOL tokens into or out of cryptocurrency exchanges. Consistent withdrawals from exchanges indicate that investors are moving their tokens into cold storage or private wallets, a behavior often associated with accumulation and a lack of immediate selling pressure. Data shows significant net outflows of SOL, with peaks seen in late May. While there’s been a recent slight uptick in deposits, this corresponds with the recent price dip, suggesting some tokens might be moved in response to volatility, but the overall trend has been towards net outflows, signaling investor confidence and accumulation rather than distribution.

These on-chain data points collectively suggest that while the SOL price may face short-term technical headwinds, the underlying network activity and investor behavior are robust. The consistent accumulation off exchanges and the low NVT ratio highlight strong fundamentals and long-term conviction, potentially providing a ‘silver lining’ or support should the price indeed test lower levels like $120.

Is $120 a Strong Buying Opportunity for Solana?

Based on the technical analysis, a drop to $120 seems plausible if the bearish pattern confirms. However, the on-chain data suggests that this level, falling within the identified daily demand zone ($95-$120), could represent a significant area of buyer interest. The combination of a technical support zone and strong underlying fundamental metrics from on-chain data could make the $120 region a critical battleground between bears and bulls.

Conversely, the bearish outlook would be invalidated if the Solana price manages a daily close above the $157 resistance level. Such a move would negate the head-and-shoulders pattern and could pave the way for a recovery.

Conclusion: Navigating the Mixed Signals for SOL Price

The current outlook for Solana price is characterized by conflicting signals. Short-term technical patterns point towards a potential drop towards $120, influenced partly by broader crypto market dynamics and Bitcoin’s performance. However, robust on-chain data metrics, such as a low NVT ratio and sustained exchange outflows, paint a picture of a healthy network and confident investor base accumulating SOL for the long term. While caution is warranted regarding the immediate price trajectory, the underlying fundamentals suggest resilience and potential for recovery, especially if the price reaches strong demand zones like the $95-$120 range.