Solana (SOL) is up 7% for the week and is once again trading above $145. But for analyst Parshwa Turakia, the move is not enough to dispel fundamental doubts.
According to their analysis, Solana is still in the risk zone, its technical structure remains weak, and suggests that the downward trend has not yet been overcome. And short-term risks continue.
“The rally from the $120 area has lost some immediate momentum, but the overall structure points to stabilization rather than another decline,” he explained. The following graph shows the price increase described by Turakhiya.
Simply put, this scenario shows that the cryptocurrency has managed to halt the sharp decline that followed. Although it is worth clarifying that It is not yet strong enough to talk about clear changes in trends.
The rebound from the $120 support was significant as the price still failed to make any relevant highs, but fell below a series of lows one after the other.
“As long as SOL remains above $135, the recovery structure will remain intact. A decline from that level will weaken the base and downside risks will rise again towards the $125-130 support band,” Parshwa Turakhiya added.
However, the analyst emphasized that unless new demand emerges, there is limited room for continued gains.
In this regard, Turakia emphasizes that, “Although the last day saw modest net inflows of around $6 million (referring to the ETF), the overall pattern in recent weeks indicates sustained distribution on the upswing.”
In other words, the situation is complicated in terms of money flow as well. There have been some recent entries, but they are limited in scale and the general behavior suggests caution.
Impact of Solana ETF
This is the specialist Mentioning the performance of SOL Exchange Traded Fund (ETF)which raised $6 million on January 13th. Since being introduced to the market, these financial products have generated cumulative revenues of $1.23 billion.
As reported by CriptoNoticias, SOL-based ETFs have shown positive performance, but capital inflows are still small relative to asset size. Therefore, The performance of these instruments does not affect the price of SOL..
Many investors appear to be taking advantage of the rally to reduce their exposure instead of making strong accumulations. This supports the idea that the market is not yet convinced that the worst is over. “This combination of increased participation rates. This uneven confidence is consistent with behavior within defined boundaries rather than an apparent acceleration of trends,” the analyst said.
In this context, the $150 level appears as an important criterion. A close above that area would be a stronger sign of a recovery and open the door for a move towards $160.
“As long as the price remains below $148, the short-term bias is sideways towards a slight decline rather than a bullish continuation,” Turakia explains.
If that does not happen, Solana will remain trapped in a correction range with the potential for the rally to find a quick ceiling and retest the lower support once momentum cools. Turakia believes the price trend confirms what was already expected. Although SOL is showing signs of calming down after the November decline, it remains in the risk zone.
“Current price action continues to validate this scenario as SOL stabilizes. However, it remains below the levels needed to confirm a sustained trend change,” Turakia concludes.
Sunny mixed scenario
From a fundamental level, the growth of stablecoins within the Solana network is a bullish signal in the long term. Significant increases in liquidity driven by USDC, the expansion of decentralized exchanges (DEXs), and the use of the network for payments and asset tokenization (RWA) indicate that the ecosystem continues to gain momentum beyond the price of SOL.
This steady flow of capital supports the idea that if the network can convert its activity into greater demand for tokens, it can maintain a bullish outlook in the medium term.
In conclusion, SOL still presents a mixed scenario. In the short term, Prices remain in the risk zone Moreover, a change in the trend has not been clearly confirmed.
However, some fundamentals are starting to work in its favor, including strong stablecoin growth and increased liquidity within the network. These factors provide a stronger foundation in the medium term, but still need to be reflected in price trends.
