Key takeaways:
Solana (SOL) faced a challenging week in 2025, plummeting 18% over the last seven days, second only to Hyperliquid in losses within the top 20 crypto assets.
This decline puts SOL/USD on track for its lowest weekly candle close since late August, heightening speculation about a potential drop to the $120 mark.
According to CoinGlass data, Solana’s futures open interest (OI) reached a record 71.8 million SOL with a value of $14.5 billion as of Thursday. Concurrently, perpetual funding rates shifted from -0.0065% to 0.0043%, reflecting the increase in OI.
Related: Australian fitness firm experiences a 21% drop due to Solana treasury speculation
Increased open interest alongside rising funding rates in a declining market may create an overleveraged environment where long positions could be unexpectedly caught off guard.
The existing market structure leans towards bearish sentiment, as indicated by various metrics. The net taker volume shows a dominance of aggressive sellers entering the market.
Additionally, spot CVD has declined, suggesting that the sell-off is primarily driven by spot trades, which also favors the bears.
Furthermore, data from DefiLlama indicates deteriorating network metrics, including a 16% drop in total value locked in Solana DeFi protocols and an 11% decline in daily transactions over the past week.
As reported by Cointelegraph, Solana’s decreasing network activity and competition from other layer-1 blockchains present significant challenges for any near-term price recovery.
SOL price technicals: Will Solana retrace to $120?
The price movement of SOL from August 2 to Thursday has resulted in a developing inverted V-shaped pattern on the daily chart.
Bears capitalized on this rally, leading to a sharp correction to current levels, reaching halfway down the pattern.
Meanwhile, the relative strength index (RSI) has descended from 69 to 37 since September 18, indicating strengthening bearish momentum without reaching an “oversold” condition.
As the price attempts to finalize the inverted V-shaped pattern, it could decline further towards the pattern’s neckline around the $155 demand zone, suggesting a potential 22% price drop from the current level.
Looking at the bigger picture, a double-top formation on the weekly chart signals a potential return to the neckline of the pattern at $120, as illustrated below. This movement would indicate total losses of 40% from current prices.
Nonetheless, the bulls could see a respite in the short term as the RSI is significantly “oversold” on shorter time frames.
As previously reported by Cointelegraph, the SOL price may continue its downtrend toward the $150-$110 range if the support at $200 is breached.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making any decisions.
