Introduction Welcome to the BitMorpho Technical Analysis for Solana (SOL) as of Thursday, December 18, 2025. The Solana market sentiment is currently characterized by pronounced short-term bearishness, contrasting with underlying strength in its long-term technological narrative. Following a significant rally earlier in the year that saw SOL reach an all-time high near 294–295 in January, the token has since corrected sharply, currently trading around the 123 mark after falling over 52% from its peak. This price action occurs against a backdrop where Bitcoin is facing potential correction toward 70,000, which is applying broad-based pressure across the major altcoins. Technically, SOL is showing signs of significant downside risk. Current analysis indicates the formation of a bear pennant pattern, suggesting a potential breakdown toward the 86 level. The token has recently broken below key support around 128, which increases the odds of testing lower levels, with 118 serving as an initial line of defense for bulls, followed by a significant support zone around 95. The Relative Strength Index (RSI) has also sent a sell signal, indicating accelerating negative momentum. Furthermore, underlying network fundamentals reflect the cooling speculative environment. Total Value Locked (TVL) in the Solana ecosystem has plunged over 34% from its peak to $8.67 billion, signaling capital flight. Compounding this, the meme coin trading volume a major driver earlier in 2025 has collapsed by 95% from its January high. While these metrics point to current weakness, institutional interest, bolstered by recent ETF inflows and market expansion, suggests a divided outlook between the immediate chart structure and long-term adoption narratives. This report will delve into the specific technical levels governing SOL’s immediate probability path. Technical Analysis Technical Analysis: Solana (SOL) - December 18, 2025 The current technical posture for Solana (SOL) reflects the pronounced short-term bearish sentiment noted in the introduction, characterized by the breach of critical support levels and negative momentum across several key indicators. # Price Action Analysis: Support and Resistance The recent breakdown below the 128 mark invalidates immediate bullish expectations and immediately targets the lower support structure. The initial line of defense for the bulls is identified around the 118 level, which represents a consolidation area preceding the current move. Should this fail, the critical support zone converges around 95, aligning closely with the projected downside target of the identified bear pennant pattern. Resistance is now established by the recently broken support, with 128 acting as immediate overhead resistance. A successful reclaim above this level is necessary to invalidate the bearish thesis, with subsequent resistance points potentially near 135.73 (R1) and 137.38 (R2) based on recent pivot analysis. # Chart Pattern: Bear Pennant Confirmation The technical expectation outlined is the maturation of a bear pennant pattern. The structure suggests a consolidation phase following a sharp initial decline (the flagpole), which, upon a confirmed breakout below the lower trendline, projects a measured move equal to the flagpole's height. With the price currently trading around 123, this pattern reinforces the downside risk toward the 86 target area previously mentioned, pending a decisive break below the immediate support cluster. # Indicator Deep Dive Relative Strength Index (RSI): The RSI is signaling increasing negative momentum. While one source indicates an RSI of approximately 39.85, leaning towards the oversold territory (below 40), another snapshot places the RSI at 52.206 as "Neutral". The discrepancy highlights market indecision, but the *context* provided in the introduction suggests a "sell signal" and "accelerating negative momentum," which aligns more with a declining RSI nearer the oversold threshold, indicating selling pressure has dominated recently, though not yet exhausted. Moving Averages (EMA/SMA): The daily perspective reveals a significant bearish alignment: the price is trading below both the 50-period and 200-period EMAs. Specifically, the price is below the EMA 50 at 148.52 and the SMA 50 at 147.97. This positioning below major long-term averages is a classic characteristic of a sustained downtrend, suggesting any bounces should be treated as selling opportunities until the price can reclaim these levels. The moving averages collectively show a "Sell" summary on the daily and weekly timeframes. Moving Average Convergence Divergence (MACD): The MACD is registering a bearish configuration. One assessment shows the MACD value at -4.64 with the signal line at -5.00, resulting in a Neutral rating, suggesting momentum is weak but not aggressively bearish at this exact moment. However, the potential for the MACD line to cross below zero or below the signal line would confirm strengthening downside momentum, consistent with the broader bearish picture. Stochastic Oscillator: The Stochastic oscillator's status is mixed. One reading suggests a Neutral reading around 48.415. This level is below the 50-midpoint but far from the oversold threshold (typically 20). This suggests that while selling has been strong, the asset is not currently *technically* oversold based on the Stochastic range, leaving room for further downside before a price reversion might be expected purely from this indicator. Bollinger Bands: The Bollinger Bands currently show the price sitting comfortably inside the bands, suggesting that the current price action is not exhibiting extreme volatility or overextension relative to its recent average range. The bands' immediate range places the lower band near $125.45. A decisive break below this lower band would signal an acceleration of volatility to the downside, likely confirming the bear pennant breakdown. Volume: While overall trading volume is noted as "around average" at approximately $3.11 billion, the critical context is the collapse in speculative volume (meme coin trading down 95%) mentioned in the context, indicating a significant withdrawal of speculative interest that fueled the prior rally. Lower volume on bounces and higher volume on breakdowns would confirm bearish control. Ichimoku Cloud: Although older data suggested the price *surpassing* the daily Ichimoku cloud as a bullish signal, the current downtrend implies that SOL is likely trading below the Kumo on the relevant timeframe, or at least below the Tenkan-sen and Kijun-sen, indicating a lack of current bullish trend confirmation. Fibonacci Retracement: While specific Fibonacci levels relative to the *current* price structure are not provided in the live data snippets, the long-term downtrend from the all-time high must be monitored against key retracement levels of the prior bull move. The projected $86 downside target should be evaluated against the next major Fibonacci extension below the 61.8% retracement of the last significant up-move. Conclusion Conclusion The technical landscape for Solana (SOL) is currently dominated by strong short-term bearish signals, stemming from the decisive breach of the crucial 128 support level. The confirmed bearish scenario projects further downside pressure, with the immediate support target resting at 118, and the critical downside objective stemming from the developing bear pennant pattern converging near the 95 to 86 range. The invalidation of this bearish structure requires a swift and decisive reclamation of the 128 resistance, with a confirmed move above 137.38 needed to suggest a meaningful reversal. The indicator readings present a mixed but generally cautious picture; while one RSI reading suggests approaching oversold territory, the overall context of the price action and the pattern confirmation points toward continued weakness unless immediate support holds. Technical Verdict: Given the confirmed pattern breakdown and the loss of key support, the analysis leans towards a Bearish Bias in the immediate term, pending a failure to defend the lower support structure. *** *Disclaimer: This analysis is based purely on technical indicators and chart patterns as of the time of writing and does not constitute financial advice. Always conduct your own thorough due diligence before making any investment decisions.*