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Solana technicals hint at potential bullish reversal
Solana's price action is flashing early signs of buyer interest as momentum and money-flow indicators diverge from recent downside moves. Technical analysis shows a bullish Relative Strength Index (RSI) divergence while the Chaikin Money Flow (CMF) has started to climb, and spot Solana ETF inflows remain steady — a combination that may cushion the market as prices test a long-term weekly support trendline established in 2023.
RSI divergence signals weakening selling pressure
Between mid-November and early December, Solana logged a lower low on the price chart even as the RSI formed a higher low, a classic bullish divergence that often precedes a reversal or at least a pause in selling momentum. The RSI, a leading momentum indicator used by traders across crypto and traditional markets, suggests that bearish momentum is losing steam and buyers could be preparing to re-enter the market.
Rising CMF points to institutional accumulation
The Chaikin Money Flow — which tracks the flow of money into and out of an asset and is frequently used to infer institutional demand — has been rising and is approaching its trendline. A decisive breakout above that CMF trendline would strengthen the case for renewed buying pressure, indicating that larger participants could be accumulating Solana positions despite recent price weakness.
ETF inflows help absorb supply amid market weakness
Spot Solana ETFs have recorded consecutive weeks of positive net inflows, with only a modest dip at the start of December. Cumulative ETF inflows can play a meaningful role in supporting price by absorbing circulating supply and reducing selling pressure. Market observers point to steady institutional demand through spot ETFs as a key factor that has helped keep Solana above recently tested support levels.
Network activity and retail trends
On-chain catalysts add a secondary layer of support. Recent developments include tokenization initiatives such as Kalshi prediction markets launching tokens on Solana and renewed retail interest in meme projects like Pippin. These events typically boost on-chain activity and can correlate with increased trading volume and retail participation.
Reversal requires a confirmed breakout; invalidation risks remain
Analysts emphasize that the bullish RSI and rising CMF are promising but not definitive. For a robust reversal, Solana needs a decisive weekly close above the resistance level that capped rallies since late November. A sustained breakout would likely open the path toward higher resistance zones that previously triggered rejections.
Conversely, a decisive break below the long-term weekly trendline would negate the bullish setup, undermining RSI divergence and CMF strength and exposing the market to further downside.
In summary, Solana currently trades in a tug-of-war between supportive ETF inflows and broader market headwinds. Traders and investors should look for confirmation via a clean breakout above resistance before assuming a sustained recovery, while a break under the key weekly support would tilt the outlook bearish.
Source: crypto
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