Alpen Glow and ETF absorption lead to technical weakness in Solana, the market is interpreting mixed signals

The Solana(SOL) market is experiencing an interesting phenomenon. Despite the inflow of institutional funds and the imminent chain upgrade, there is a paradoxical situation where technical weakness is intensifying.

Chain Reaction of Positive Catalysts

The recently launched Solana ETF has already recorded over $730 million in net inflows, with the Bitwise Solana ETF leading the capital influx. This indicates that institutional investors’ interest is genuinely shifting.

What’s even more noteworthy is the AlphenGlow upgrade scheduled for Q1 2026. This upgrade is not just a performance enhancement but fundamentally changes Solana’s economic viability. It aims to significantly improve cost efficiency compared to competing chains like Ethereum by increasing transaction speed and reducing validator costs.

The ecosystem size is also substantial. Solana currently has a total value locked (TVL) of $18.3 billion in the DeFi sector and $830 million in the real-world asset (RWA) sector, establishing itself as more than just an L1 chain but a practical economic hub.

The Reality of Technical Weakness

Nevertheless, on the daily chart, a head-and-shoulders pattern has formed, signaling a clear bearish trend. SOL, which fell from $294.30 at the start of the year to $141.60 now, is trading below both the 50-day EMA and the supertrend indicator.

Technical indicators also emphasize the bearish outlook. The MACD is below the zero line, and the RSI is approaching oversold territory. If the $100 level breaks, further declines are inevitable, and in the worst-case scenario, a drop to $75 cannot be ruled out.

Reading the Market Duality

Ultimately, the Solana market shows high confidence from institutional investors in spot ETF funds and the underlying assets, but at the same time, there is selling pressure due to short-term technical weakness. Despite the structural strengths of the confirmed AlphenGlow upgrade and the expansion of the DeFi/RWA ecosystem, volatility is likely to persist until technical recovery occurs. The key future question is which side—institutional buying or technical weakness—will lead the market first.