Solana has experienced strong compression at around $120 and $125 in the past few days. Solana price prediction turns bullish as SOL coils between $120 and $125, signaling heavy accumulation. A breakout above $130 could trigger a short squeeze that could rapidly push SOL back to $200. Solana (SOL) has gone up by 1.3% in the past 24 hours and currently stands at $126 as the token has been trading in a tight range for a few weeks now.
This signals strong accumulation at a point when technical indicators seem to be indicating that the cycle’s bottom is already in. In the past 7 days, the token has gained 3.3% after bouncing off $118 last Thursday. Solana’s on-chain metrics show that the network’s activity has steadily declined in both November and December compared to October’s peak. Data from DeFi Llama shows that DEX volumes have increased by 11% in the past week, but they will still close the month nearly a third lower compared to October.
Artemis data shows that monthly active users within the Solana blockchain have declined sharply from a peak of 6.7 million back in November 2024 to 3 million at the time of writing, reflecting much lower interest in Solana meme coins. Similarly, Solana’s monthly transactions have dropped from 3.5 billion in July to 2.3 billion in November, while the network’s stablecoin balance has been steadily climbing from $10 billion in June to $15 billion as of last month. This indicates much lower trading activity, billions of dollars standing on the sidelines amid the market’s latest turmoil, and a shrinking ecosystem. Ethereum’s technical overhauls this year may have contributed to depressing these on-chain metrics, as Solana’s top competitor has lowered its network fees and improved its scalability.
This narrows Solana’s competitive edge over what is currently the leading blockchain in the DeFi and RWA spaces. The daily chart shows that SOL has formed a tight falling wedge pattern as the price has experienced significant compression between $120 and $125. This may indicate that the bottom is in, as investors seem convinced that this is a fair value for the token right now. This increases the odds of an explosive move ahead if SOL manages to rise past $130 – its structural pivotal price.
If that happens, the downtrend will be invalidated, and bears may get squeezed out rapidly if the price rises past $140 – $150. January has typically been a bullish month for altcoins. Hence, the stage looks set for a strong move upwards now that market sentiment seems to be improving. As we indicated in previous price predictions, the Fear and Greed Index making new record lows of 11 may have marked the end of this bearish cycle as pessimism reached extreme levels without justification.
The last time this happened, back in April, the market rallied and pushed SOL to $200 just a few months later. Will history repeat?
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