Solana Faces Caution as Treasury Stocks Signal Weak Demand

SOL Eyes Breakout as Treasury Weakness Meets Bullish Setup

The future of Solana (SOL) suggested by Crypto market analysts is mixed as institutional presence is decreasing, and liquidity is moving across the industry. Even though the token has been strong in the short term, the same does not reflect in its treasury stocks. This is a gap between what the ecosystem holds and what is going on on-chain, suggesting that there is a reserved investor disposition.

At the same time, technical signals on the main chart suggest that the next major move could be decisive for market direction.

Analyst Ted Pillows recently noted a downswing in many of Solana-related treasury shares, such as those of Forward Industries and DeFi Development Corp. All have found it difficult to take root, most having since slipped or consolidated following sharp falls. This implies that the institutional exposure to the Solana ecosystem is limited. 

Solana Treasury Stocks | Source: X

Moreover, there is an inflow of capital into Bitcoin spilling over to Ethereum. Historically, this capital rotation pattern happens at an early stage of bull cycles when liquidity has yet to make its way to altcoins like SOL.

Additionally, Ted singled out November as the possible inflection point. Altcoins could pick up depending on seasonal tail winds and other upcoming events, especially if Bitcoin retains its strength. Before that, however, the existing pullback could go deeper.

Solana Builds Momentum Toward $300 Target

Analyst Trader Tardigrade identified the inverse Head and Shoulders pattern on the 4-hour chart, indicating a change from bearish to bullish momentum. The neckline of about $240-$245 is a critical breakout zone where a close above the zone, with volume support, could push SOL to the $300 level. This is in line with resistance in the past and reflects historical stages preceded by prolonged consolidations.

SOLUSD 4-H CHART | SOURCE: X

On the other hand, the technical structure of the ecosystem suggests new momentum in the term. If the momentum builds, SOL could make a resurgence to the zone of $300. Solana is trading around $230, maintaining its position in the consolidation range as traders expect a confirmation of a breakout.