Solana Analysis: SOL Price Unlikely to Exceed $150 for the Time Being

Solana analysis: SOL price unlikely to break $150 for now

Key Takeaways:

Solana's Total Value Locked (TVL) has declined 20% in November, accompanied by a 16% drop in network fees, which indicates a decrease in network demand.
A bear flag pattern suggests that SOL's price may experience a further correction down to $100.

Weak Network Activity Puts SOL Recovery at Risk

According to Cointelegraph, Solana exchange-traded funds (ETFs) experienced a halt in net inflows, recording their first single-day net outflow of $8.2 million on Wednesday.

Related: Solana treasury supports a 'double disinflation' plan amid a 30% price drop

This trend suggests a decrease in institutional demand as network activity slows down. Data from Nansen reveals that network metrics are weakening, with a 6% reduction in active addresses and a 16% drop in network fees over the past week.

30-day performance of major blockchains. Source: Nansen

Similarly, Solana's Total Value Locked (TVL) has fallen 20% this month, hitting a low of $9.1 billion on November 11, down from its September peak of $13.23 billion.

Solana: total value locked. Source: DefiLlama

Among Solana projects, Jito showed significant weakness, with its TVL declining by 33% over the last 30 days. Other projects like Jupiter (-28%), Raydium (-31%), and Sanctum (-22%) also faced notable reductions.

Although this does not guarantee that Solana's price will remain below $150, the technical indicators suggest that there may still be room for declines. The stagnant network fees and a weak derivatives market could further postpone SOL's potential recovery.

Upbit Hack Casts a Shadow of Uncertainty

Recently, Upbit faced a $36 million hack involving its Solana hot wallet, which has injected fresh uncertainty into the SOL market at a time when the token was beginning to recover from previous lows around $120.

🚨 ALERT: Upbit halts deposits and withdrawals following a $38.5 million abnormal outflow on the Solana network, reporting that assets were transferred to an unknown wallet on November 27.

Upbit has confirmed it will cover all associated losses.

By suspending SOL deposits and withdrawals for maintenance, the South Korean exchange has restricted liquidity, which could intensify sell-offs. This disruption affects trading flows, making it difficult for users to enter or exit their positions, thereby increasing volatility that may diminish the momentum towards the $150 resistance level.

Despite the breach, SOL's price rose by 3% to $143 after the announcement, indicating some resilience. However, the gains may face pressure in the short term.

Bear Flag Pattern Suggests SOL Price Target of $100

The recent price action of SOL has formed a textbook bear flag pattern on the six-hour chart, marking a bearish continuation. This pattern emerges when the price consolidates upward in a parallel channel following a swift downward move.

In Solana's case, the flag formation started after SOL peaked at around $170 on November 17. Since then, the price has continued its upward consolidation, testing the support line of the flag, which is currently at $140.

If SOL breaks below this support level, it will confirm the bear flag pattern, potentially leading to further declines towards the projected target of $99. Such a drop would result in a total loss of 30%.

SOL/USD six-hour chart. Source: Cointelegraph/TradingView

Trader MR Ape indicated that the $145 level is significant, having "rejected the price three times already, and momentum is slowing again" as SOL approaches this crucial zone. According to Cointelegraph, a dip below the bottom of the flag at around $120 could lead to the SOL/USDT pair dropping to $110, and possibly down to $95, where buyer interest is expected to increase.