SOL ETF news gain evaporates, while chart warns of another 20% drop

Key takeaways:

• SOL’s 5% ETF-driven rally to $160 was reversed entirely within 24 hours, exposing persistent technical weakness on the lower and higher time frames.

• SOL trades near a key $144.5–$147.7 supply cluster. A breakdown below $144 could trigger a drop to $124 or even $95–$100, where support thins out.

SOL ( SOL ) rallied 5% to hit $160 on Monday following news of its first exchange-traded fund (ETF) going live for trading on Wednesday. However, the momentum was short-lived as the altcoin erased all gains within 24 hours, and price weakness can be seen on multiple time frames.

In the lower time frame, SOL has failed to maintain a position above the 50-day and 200-day exponential moving averages (EMAs) for over a month. Despite several bullish break-of-structure formations, including last week’s pop above $148, the altcoin has not converted these into sustainable uptrends.

The $148 level is currently under pressure, and a drop below $137 would confirm a lower low, negating the chance of near-term bullish continuation. For SOL to regain upside momentum, a successful retest of the $145–$137 demand zone, followed by recovery above $160, remains pivotal.

On the higher-time frame (HTF), the broader trend remains bearish. In May, SOL failed to breach the key resistance at $180 and has since trended downward within a descending channel.

While such patterns can lead to bullish breakouts, SOL has remained highly sensitive to Bitcoin’s weakness throughout the past month. While Bitcoin ( BTC ) hovers near all-time highs, the crypto asset has declined nearly 50% since Jan. 19, reflecting relative underperformance.

If the bearish trend persists, a retest of the daily order block between $120 and $95 remains realistic, offering a more attractive long-term entry point. However, a strong daily close above $160 in the coming weeks could flip sentiment and accelerate a bullish reversal, carrying short-term momentum into the higher time frame.

Related: Analysts raise chance of SOL, XRP and LTC ETF approval to 95%

SOL UTXO realized price signals key price levels

SOL trades around $148 on Tuesday, with its UTXO realized price distribution (URPD), a metric tracking the price levels at which tokens were acquired, offering critical insights into support and resistance zones. The current price sits within a supply cluster of 14.3% at $144.5 to $147.7, suggesting strong holder concentration. This level is pivotal, as a range that could sustain the current price if buying pressure holds.

Data from Glassnode indicates that maintaining above $144 is crucial. A breach below this threshold signals potential weakness, increasing the likelihood of a retest of lower support zones. 

The $100-$97 range holds 3% of the supply, while $124 supports 1.58%, offering limited buffers. If price fails to hold above $144, the market risks a deeper decline toward these levels, where thinner supply could amplify volatility.

Resistance emerges at $157, where 5.55% of supply is concentrated, posing a challenge for upward momentum. For now, the dense $144.5-$147.7 cluster underscores a solid base, where investors should defend SOL price.

Related: SOL price rallies to $161 after ETF news, but is the rally sustainable?