Can new protocol upgrades support Solana despite ongoing regulatory scrutiny?

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Solana rises 0.56% as Alpenglow launches

Highlights

Solana activated the Alpenglow consensus protocol, targeting transaction finality around 150 milliseconds to improve network efficiency.
Chinese regulators halted the Solana Accelerate event in Shanghai and opened an investigation into its recent marketing activities.
SOL/USD trades below short- and medium-term moving averages with a predicted range of $88.03 to $92.43 and a 71% chance of downside in the next 2 to 3 days.

Protocol upgrade and regulatory pressure shape adoption outlook

Solana's mainnet has activated the Alpenglow consensus protocol, targeting a substantial reduction in transaction finality to around 150 milliseconds, according to Coinfomania. This technical milestone is expected to enhance network efficiency and may attract developers and users seeking faster settlement, offering a moderate catalyst for longer-term adoption. Meanwhile, Chinese regulatory authorities halted the Solana Accelerate event in Shanghai and the People's Bank of China launched an investigation into recent marketing activities, as reported by Cryptotimes, which may temper sentiment in the region.

Technical divergence persists as momentum weakens against support

On the technical front, SOL trades below the 20-period and 50-period moving averages, suggesting ongoing short- and medium-term weakness, while remaining above the 200-period moving average, which provides foundational support. The Ichimoku Kijun at $90.39 acts as near-term resistance. MACD signals strong bearish momentum, though ADX remains neutral. RSI, Stoch RSI, and CCI are all in neutral zones, indicating no obvious overbought or oversold conditions, while Bull/Bear Power is slightly positive at 0.07 and Awesome Oscillator stays neutral. This mixed set of readings points to a divergence between price action and momentum indicators.

Downside risk outweighs breakout as consolidation dominates short term

Over the coming 2 trading days, SOL is expected to trade within a range of $88.03 to $92.43, reflecting typical volatility for current market conditions. There is a 29% probability of an upward breakout above resistance, but a higher 71% likelihood of a downside move, with $88 as the key level to watch for bearish confirmation. The baseline scenario envisions continued consolidation within this corridor barring a directional catalyst.

Anton Kharitonov, expert at Traders Union, sees Solana's latest technical improvement with the Alpenglow protocol as a positive foundation for long-term use. However, he notes immediate market sentiment remains cautious due to regulatory intervention in China and persistent technical weakness below key moving averages. The analyst believes downside risks still outweigh bullish factors for now, and price action is likely to be limited by resistance at $90.39. "Until SOL can recover above near-term resistance with improving momentum, I remain defensive on further upside," says Kharitonov.

Earlier, analysts noted that Solana was facing heightened downside risk due to ongoing regulatory pressure and prevailing bearish momentum. The current analysis reinforces this cautious outlook, pointing to a higher probability of a downside move and highlighting $88 as the critical level for traders to monitor in the near term.

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.