Key takeaways
Solana (SOL) is down nearly 2% over the past 24 hours after failing to break above the crucial $78 resistance.
Spot Solana ETFs have recorded net outflows, signaling weaker institutional demand.
A break below $74 could send SOL toward $64, while a breakout above $78 may trigger a rally to $90.
Solana (SOL) extended its recent pullback on Friday, falling nearly 2% over the past 24 hours as buyers once again failed to overcome the key resistance level at $78.
Although cooling U.S. inflation briefly boosted risk appetite earlier this week, the rally lacked enough momentum to sustain a breakout. At the same time, declining trading volumes and renewed ETF outflows have added to the cautious outlook.
Trading activity cools after recent rally
Market participation has slowed noticeably in recent sessions. Daily trading volume has fallen from a short-term peak of approximately $4 billion on July 2 to around $2 billion, suggesting reduced buying interest following the recent rebound.
The inability to break above the $78 resistance despite improving macroeconomic sentiment indicates that bullish momentum may be weakening.
Institutional sentiment has also softened. According to CoinGlass, Solana-focused exchange-traded funds (ETFs) have recorded approximately $700,000 in net outflows this week.
The reversal contrasts with recent weeks, when Solana ETFs attracted more than $1.1 million in inflows and accumulated nearly $3 million since the beginning of the month.
The shift suggests institutional investors remain cautious as uncertainty surrounding interest rates and broader market conditions continues to weigh on risk assets.
Despite weaker price action, Solana’s network fundamentals continue to improve.
Data from Santiment shows that daily active addresses (DAAs) have continued to climb, indicating growing user activity across the network.
Notably, the 30-day moving average of daily active addresses has crossed above the 50-day moving average, with the gap widening in recent days.
Historically, similar crossovers have preceded significant price movements for Solana, although they do not indicate whether the move will ultimately be bullish or bearish.
The increase in active wallets suggests investors are positioning ahead of the token’s next major directional move.
SOL faces a critical technical crossroads
Technically, Solana remains trapped below the important $78 resistance level. The repeated rejection at this price has reinforced it as a key barrier that bulls must overcome before a sustained recovery can develop.
On the downside, the immediate focus shifts to the ascending trendline support near $74. This level represents a crucial defense for buyers.
If $74 fails to hold, Solana could accelerate lower toward the next major support around $64.
Momentum indicators are beginning to favor the bears. The Relative Strength Index (RSI) has slipped to around 49, falling below its signal line and indicating weakening bullish momentum.
A move toward 40 would strengthen the bearish outlook and suggest sellers have gained greater control.
Conversely, a decisive breakout above $78 could trigger a wave of short covering, as a significant number of stop-loss orders are believed to be positioned above that level.
Such a move could accelerate buying momentum and open the door for a rally toward $90.
For now, Solana remains at a pivotal technical level, with declining institutional flows contrasting against strengthening on-chain activity. The next breakout or breakdown is likely to determine the token’s short-term direction.
