Solana Faces Bearish Pressure Below $190 Support Amid Double Top Formation and On-Chain Divergence

Executive Summary

Solana (SOL) is under significant bearish pressure, evidenced by a double top pattern near the $250 zone and its failure to sustain above the critical $190 support level. This technical breakdown suggests a high probability of further price depreciation, with analysts identifying potential targets around $165 and $147.

The Event in Detail

Technical analysis indicates that SOL formed a double top pattern near the $250 price point, a classic bearish continuation signal. Following this, the cryptocurrency failed to maintain its position above the upper channel resistance and subsequently broke below its midline support, confirming short-term weakness. Currently, SOL is retesting the neckline area around $190. A failure to reclaim this level would likely confirm an accelerated move towards the next key support zones at $165 and $147. A clean break below $165 could precipitate a further decline toward $147, signifying a deeper correction within its broader ascending channel.

Recent price action reflects this downturn, with Solana having declined 18.80% from its multi-month high above $250. It now trades around $206, positioned below its 50-period exponential moving average (EMA) at $210 and slightly beneath its 200-period EMA at $213. This movement has also led to the formation of a bear flag pattern, typically a bearish continuation signal, which targets a potential further decline towards $175, a level that aligns with horizontal support from mid-August.

Market Implications

The immediate market implication for Solana is a heightened risk of further downside. If selling pressure intensifies and SOL falls below $205, downside risks could extend to the $195–$190 support band. A more significant breach below the 100-day EMA, approximately $182.84, would invalidate current bullish setups and expose the $174–$170 region. The Relative Strength Index (RSI) hovers near 47, indicating neither oversold nor overbought conditions, which leaves ample room for potential fresh downside.

A significant concern is the growing negative divergence between Solana's price and its on-chain network activity. While SOL's price surged from $175 to over $220, daily active addresses reportedly dropped from over 4 million to approximately 2.7 million. Similarly, the daily transaction count on the Solana network fell nearly 50%, from around 125 million to about 64 million. Although 80–90% of Solana's transactions are "vote transactions" for network consensus, a decline stemming from reduced user activity would severely question the credibility of the current upward price trend and increase the risk of a significant price correction.

Broader market events have also impacted Solana. Following announcements of potential tariffs on Chinese imports, the cryptocurrency market experienced a substantial decline. Solana was among the hardest hit, plunging 17% to $183 as investors reduced risk exposure amidst concerns over trade tensions, inflation, and global market uncertainty. This overall market contraction, the largest single-day decline for the crypto market in 2025, saw the total value of all cryptocurrencies drop from $4.30 trillion to $3.74 trillion.

Expert Commentary

Analysts emphasize the critical importance of the $190 level for Solana. melikatrader94 notes that failure to reclaim this neckline area is likely to lead to further downside. CryptoOnchain from CryptoQuant highlights the divergence in on-chain activity, underscoring that if the decline in transactions is related to user activity, the current price trend's credibility is significantly challenged.

However, some technical analysts point to conflicting signals. A rising wedge pattern on the daily chart, which typically resolves to the downside, has seen Solana reclaim its lower trendline as support, suggesting sellers might be losing grip. Additionally, a hidden bullish divergence has been observed on Solana's daily chart, which could indicate a continuation of the uptrend. Optimism is also building around the potential approval of a Solana Exchange-Traded Fund (ETF), with decisions anticipated as early as October 10. Analysts, including Lark Davis, have predicted that ETF momentum could propel SOL's price as high as $425. JPMorgan estimates potential inflows of $1.5 billion if a Solana ETF launches.

Broader Context

Despite the recent bearish technical indicators and on-chain divergence, Solana's fundamentals present a more complex picture. The platform has seen rapid growth as a Real-World Asset (RWA) tokenization hub, with issuance ballooning from $5 billion in 2022 to over $29 billion by September 2025. This includes nearly $700 million in RWAs and more than $13.5 billion in stablecoins settled on its network. Institutional confidence remains robust, with Total Value Locked (TVL) hitting $42.4 billion, even as on-chain activity has declined.

Conversely, retail interest appears to have partially shifted, with meme coins on the BNB Chain, such as $BSC, experiencing significant surges and attracting $20.5 billion in daily volume compared to Solana's $12.7 billion. This gap indicates a broader reallocation of speculative capital. Regulatory caution, particularly the SEC's delayed approval of Solana ETFs, continues to influence market sentiment. Solana's ability to defend the $200–$220 zone will be pivotal in the coming weeks; a sustained close above $230 could validate a path to $250 and beyond, while a breakdown below $200 risks triggering deeper selling.