TLDR:

Solana tests the $120-$127 zone, where the ascending trendline from the 2023 lows meets horizontal support.
Token broke $136 support with a bearish engulfing candle after months in $130-$145 trading range.
Solana DEX maintains $8.43 billion TVL despite price weakness, showing that network strength persists.
A hold above $120 could target a $180-$200 recovery; a breakdown risks a deeper drop toward the $75 level.

 

Solana has dropped below $130 in recent trading sessions, entering a decisive technical zone that could determine its medium-term trajectory. 

The digital asset now hovers near $120, a confluence point where rising trendline support meets horizontal price memory from previous market cycles. 

This compression phase follows months of range-bound trading between $130 and $145, punctuated by broader crypto market weakness that has pressured most major tokens lower in recent weeks.

Technical Structure Points to Make-or-Break Moment

The $120 to $127 zone represents more than routine support on Solana’s price chart. Analysis from Ali Charts highlights this area as a critical inflection point on the three-day timeframe, where an ascending trendline dating back to 2023 lows intersects with established horizontal support. 

This trendline has guided SOL’s upward structure for over a year, maintaining a measured slope that suggests organic accumulation rather than speculative overextension.

Price action around $120 carries weight from multiple angles. The level previously acted as resistance during earlier rallies before converting to support, creating what technical analysts call a “flip zone.” 

When former resistance becomes new support, it typically signals strong institutional interest and committed buying. 

However, the current test will reveal whether that buyer commitment remains intact amid deteriorating market conditions.

The token broke through $136 support recently, forming a bearish engulfing candle pattern that typically precedes further downside. 

Nevertheless, bulls point to oversold conditions on shorter timeframes and Solana’s robust fundamental metrics, including $8.43 billion in decentralized exchange total value locked. 

This suggests underlying network strength despite price weakness, a divergence that sometimes precedes trend reversals.

Memecoin Volatility and Market Sentiment Create Crosscurrents

Solana’s ecosystem has experienced heightened volatility from memecoin activity, adding complexity to price analysis. Tokens like WhiteWhale have generated extreme pump-and-dump cycles, including a 60 percent collapse following a $1.3 million whale liquidation. 

These speculative swings create noise in the broader market, though platforms such as Pump.fun recently recorded $4 billion in daily DEX volumes, demonstrating sustained trader interest.

Market sentiment remains split between competing technical interpretations. Bears cite chart patterns suggesting potential drops toward $100 or lower if the $120 level fails to hold. 

This camp views the current structure as a continuation pattern within a larger corrective phase. Conversely, optimistic traders see oversold momentum indicators and strong network fundamentals as precursors to a bounce.

The next several trading sessions will likely resolve this standoff. A decisive hold above $120 followed by reclamation of $127 would validate a higher low formation on the three-day chart, potentially opening a path toward $180 to $200. 

Alternatively, a sustained breakdown below this support would compromise the uptrend structure, increasing the probability of a deeper retracement toward the $75 region that served as support during previous corrections.

The post Solana Approaches Critical $120 Support as Technical Structure Faces Decisive Inflection Point appeared first on Blockonomi.

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Filed under: Bitcoin - @ January 21, 2026 7:10 am