Long-term downward trend limits Solana upside

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Solana rises 2.51% today to $87.95

Highlights

Solana faces elevated cybersecurity and long-term encryption risk concerns after high-profile hacks and quantum vulnerability warnings, raising uncertainty around the network's future resilience.
Ongoing SOL liquidations by the FTX bankruptcy estate are increasing circulating supply and putting regulatory scrutiny on asset transfers in insolvency events.
SOL shows short-term bullish momentum but remains in a range of $85.00 to $91.00, with technicals signaling weak trend strength and a higher probability of downside.

Security concerns intensify as quantum risk and hacks drive withdrawals

Solana is under scrutiny after Coinbase’s Independent Advisory Board identified its reliance on Ed25519 cryptographic signatures as a potential quantum risk, emphasizing concerns over the ecosystem’s future security should quantum computing break current encryption standards. The ongoing sale of SOL holdings by the FTX bankruptcy estate is increasing circulating supply and drawing attention to the regulatory aspects of asset management in bankruptcy proceedings. Additionally, a recent hack attributed to North Korean state-backed actors resulted in the theft of over $200 million from KelpDAO via LayerZero vulnerabilities, prompting some users to withdraw funds from Solana-based DeFi protocols and heightening awareness of cybersecurity threats affecting the network.

Mild bullish bias as technical signals remain mixed and trend lacks strength

SOL trades above its MA-20 of $83.91 and MA-50 of $85.89, but remains far from the MA-200 at $124.83. The Ichimoku Kijun at $83.72 is the nearest support, while upside resistance is established around the session high. Daily MACD issues a 'Buy' signal, with a modest ADX reading of 10.93 reflecting weak trend strength. RSI at 50.82 and CCI at 56.04 both indicate mild bullish momentum, while Stoch RSI is neutral and BBP registers at 1.54, showing intraday buyer strength. Despite these, the Awesome Oscillator remains neutral, and overbought signals are evident on lower timeframes.

Retracement risk rises as bullish momentum falters within narrow range

Over the next five trading days, price action is expected within a typical volatility band of $85.00 to $91.00. Short-term upside momentum is unlikely to persist, as longer-term technical signals suggest a greater likelihood of retracement or consolidation. A clear move above $91.00 would open a bullish scenario, while breaking below $85.00 could trigger renewed selling toward support.

Anton Kharitonov, expert at Traders Union, sees Solana’s technical posture as mildly positive in the short term, with prices above key moving averages and moderate buyer presence. He remains cautious given heightened cybersecurity concerns, the FTX estate’s ongoing asset sales, and the ecosystem’s potential cryptographic risks. The analyst expects any bullish momentum to be limited, with price trapped between $85.00 and $91.00. "Unless SOL breaks decisively above $91.00, I stay defensive and expect consolidation or downside risk to dominate."

Earlier, analysts noted that Solana was consolidating amid mixed technical signals and ongoing institutional interest, with caution around a potential directional shift. The emergence of fresh security concerns and increased regulatory scrutiny now add new downside risks, making it critical for traders to monitor price stability above the $85.00 support level in the coming sessions.

Source of Data: SOL Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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