Solana price prediction: SOL drops 4.8% after six-day rally hits December supply zone
Solana posted its first daily loss of the year on Wednesday, January 7, ending a six-day winning streak that had lifted the price to a high of $143.4. That surge encountered resistance near the December supply zone, which triggered a rejection and the start of a short-term correction. Solana declined by 4.8% on Wednesday, marking the sharpest single-day drop in January so far.
Highlights
- Solana posts a 4.8% drop after a six-day rally rejects the near December supply zone
- SOL outperforms BTC year-to-date, supported by spot ETF demand
- Long-short ratio rises as price stabilizes above 4h 50 EMA near $134
The pullback also broke below the 1-hour 20, 50, and 100 EMAs that had supported the prior uptrend. This break signaled that the immediate bullish momentum had weakened. During Thursday’s European session, Solana extended its decline below the previous day’s low of $134.3 before recovering slightly to trade near $136. That recovery has flattened the intraday loss, helping the price stabilize near its opening level.
Solana price chart (Dec 2025 - Jan 2026). Source: TradingView
Despite the retracement, Solana has preserved its week-to-date gains, currently standing at around 1.5%. This keeps Solana stronger relative to Bitcoin, which is down over 1% during the same period. Year-to-date, Solana is up more than 9%, while Bitcoin is up around 3%. One key reason for this relative strength is sustained institutional interest in Solana spot ETFs, contrasting Bitcoin’s recent ETF outflows.
SOL long-short ratio and funding rate confirm sustained bullish positioning
On the technical side, momentum has cooled but not shifted bearish. The 4-hour RSI is hovering near the neutral 50 level, while the daily RSI is still in bullish territory at 57. This suggests that while short-term traders have pulled back, medium-term sentiment is still constructive. Solana is also holding just above the 4-hour 50 EMA, currently around $134. This moving average is acting as near-term support.
Meanwhile, the long-to-short ratio has increased from 2.8 to 3.5 since the recent decline, showing that more traders are entering long positions during the dip. In addition, the funding rate has been climbing, further confirming bullish positioning among leveraged traders.
If Solana holds above the 50 EMA on the 4-hour chart, the price could rebound toward a retest of the recent high at $143.4. A successful breakout may extend the early-year rally. However, a break below the 50 EMA could shift the 4-hour RSI into bearish territory and open downside toward the $130 support zone.
In recent analysis, we discussed how Solana held above short-term EMAs after retreating 2% from the $141 Asian open. ETF inflows above $16 million and Morgan Stanley’s filing added institutional support to the rally.
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