to leave a comment.
▲ Solana (SOL) ©
Despite the shock of a 71% plunge from its all-time high, the Solana (SOL) market is preparing for a major turning point in the fateful third quarter, holding reversal cards such as robust institutional capital inflows and the explosive growth of its Real World Asset (RWA) ecosystem. Currently, Solana is trapped around the $85.57 mark, recording severe capital valuation losses compared to its peak. However, it is evaluated to have reached an inflection point where it is enduring downward pressure while simultaneously compressing strong technical rebound potential. Among experts, there is a strong emerging analysis that the current convergence zone, where short-term speculative leverage has been completely liquidated, could provide unprecedented asymmetric profit opportunities if it breaks upwards in conjunction with future mainnet performance transformations.
According to the investment media TradingNews on May 25 (local time), Solana has fallen 71% from its all-time high (ATH) of $294 recorded in January 2025, and is experiencing a slump, having dropped approximately 38% from its market cap at the beginning of this year. Technically, it is positioned below the entire Exponential Moving Average (EMA) resistance, including the 50-day moving average of $87.35 on a daily basis, indicating that it has entered a typical structural bear market. The Relative Strength Index (RSI) is 46.46, reflecting subdued demand below the neutral line, and the Moving Average Convergence Divergence (MACD) also remains in negative territory, showing the dominance of downward momentum. There are warnings that if it fails to overcome the strong resistance wall positioned between $86 and $89 and even breaks the short-term support level of $83.50, a so-called Double-top collapse pattern could be completed, causing the price to plummet vertically to $64.
Conversely, on-chain fundamentals, moving in direct opposition to these price trends, are Solana's powerful weapon. In particular, the value of the Solana-based Real World Asset (RWA) ecosystem surged by 22% in the last 30 days, surpassing $2.57 billion and firmly establishing itself as the third-largest in the industry, following Ethereum (ETH). Although there are observations that actual transaction activity has somewhat slowed down, the outward growth in new asset issuance and deposit value is visible. Furthermore, even as billions of dollars are pouring out of the Bitcoin (BTC) and Ethereum spot ETF markets, the Solana spot ETF complex has recorded net inflows of $15.63 million weekly for three consecutive weeks, demonstrating the unique trust of institutional investors.
The extreme structural improvement in the derivatives market is also expected to be a springboard for a future rebound. According to CoinGlass data, Solana's futures Open Interest (OI) stands at $5.45 billion, a staggering 68% contraction from its peak of $17.1 billion recorded in September 2025. This level is similar to the 71% price drop, signifying that the excessive speculative long positions and leverage bubbles that weighed down the market have been completely cleared. With long funding rates significantly reduced, the risk of further cascading liquidations (long squeeze) has structurally disappeared, creating an optimal environment for the price to rise easily without the burden of sell-side overhang when positive news emerges in the future.
The biggest reversal catalyst for Solana, which the market is watching, is undoubtedly the 'Alpenglow upgrade,' currently undergoing testing with a target launch in Q3 this year. Alpenglow represents a megaton-level change, completely overhauling Solana's consensus algorithm layer. Its core specification is to reduce the transaction finality time, currently at 12.8 seconds, to a level of 100-150 milliseconds (ms). If successful, it will secure an overwhelming speed advantage among major Layer 1 networks, and the Votor system will also be introduced to resolve the chronic network congestion issues. Experts predict that if Alpenglow successfully integrates into the mainnet, it will lead to a complete re-evaluation in the competition for dominance with Ethereum and rival chains, recapturing $100 instantly and driving the price to the $200 mark by year-end.
Consequently, Solana has entered an extremely compressed zone where its short-term direction will be determined by whether it breaks through the short-term resistance level of $86.40 with high trading volume or yields the support level of $83.50. Currently, the Crypto Fear & Greed Index remains at 30 (Fear), and Bitcoin dominance is at 58%, putting pressure on the entire altcoin market. However, long-term chart analysts assess that if Solana establishes a bottom between $80 and $100 and then breaks through the long-term downward resistance line, it has sufficient potential to stage a massive rally, reaching $500 to $675, and over $1,000 in extreme bullish scenarios. The timely implementation of upgrades and the acceleration of ETF capital inflows are the key factors that will determine the success or failure of this massive asymmetric bet.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.