Solana Price Analysis: Will It Drop Below $120?
Solana (SOL) has been facing heightened selling pressure, causing its price to dip below $130 on January 20, 2026—an approximate 4% decline within 24 hours. This downturn reflects the broader cryptocurrency market’s volatility, with Bitcoin also experiencing corrections by dropping to around $90,600.
Key Trends Driving Solana’s Bearish Momentum
Market indicators suggest a bearish outlook for Solana in the short term. The imbalance between long and short positions indicates vulnerability among bullish traders. Most notably, over 95% of recent liquidations have come from long positions, resulting in cascading sell-offs.
Bearish Technical Indicators
- Moving Averages: Solana has fallen below its 20-day and 50-day exponential moving averages, which are clustered at $137 and $159, respectively.
- MACD: The daily MACD line has crossed below the signal line, with expanding negative histogram bars.
- RSI: The RSI currently sits at 41, nearing oversold territory, signaling further downside potential.
If support levels at $125-$126 fail, Solana could dip to $120 or even retest December 2025 lows of $116. However, resistance levels around $137, $145, and $160 may provide obstacles to upward movement.
Institutional and Derivatives Market Impact
Institutional inflows provide a mixed picture. US spot Solana ETFs have seen steady growth, with over $47 million in net inflows last week. This trend has built upon $41 million and $20 million inflows from prior weeks. However, increased spot-driven selling poses a risk of eroding this support base, potentially triggering outflows.
Meanwhile, derivatives data points to a bearish tilt. The total open interest in Solana futures has decreased to $8.2 billion due to diminished risk appetite. Funding rates hover around a neutral 0.0070%, but declining sentiment has pushed Solana prices down by 8% over the past week.
What to Watch For
Around $1 billion in real-world assets linked to Solana offers long-term potential for the blockchain ecosystem. However, short-term volatility remains a concern as global economic uncertainties and cryptocurrency market instability weigh on sentiment. Bitcoin’s price trajectory will also be a crucial factor affecting Solana’s market position.
How to Manage Market Volatility
Given the current climate, leveraging secure tools for portfolio management can help reduce risks. Consider using trustworthy hardware wallets like the Ledger Nano X for safely storing cryptocurrency assets.
Conclusion
The coming days will be critical for Solana as it faces possible dips toward the $120 mark. As bears dominate the market, traders should monitor key resistance and support levels and stay updated with Bitcoin’s price movements to make informed decisions.
