Solana Faces Key $118 Test as ETF Flows Show Selective Rotation

U.S. crypto markets closed the year with mixed ETF flows, while Solana drew fresh attention from traders watching a decisive technical zone. Data from SoSoValue showed uneven institutional positioning across major assets, even as SOL price action hinted at a possible turning point. Consequently, analysts shifted focus from fund flows to short-term structure, where Solana now faces a make-or-break test.

ETF Flows Show Rotation, Not Risk Exit

According to SoSoValue, U.S. spot Bitcoin ETFs recorded net outflows of $19.29 million on Dec. 29. However, Fidelity’s FBTC stood out with a $5.70 million single-day net inflow, signaling selective buying rather than broad selling. Besides Bitcoin, Ethereum spot ETFs also posted net outflows totaling $9.63 million, reinforcing a cautious stance toward large-cap exposure.

Significantly, smaller networks attracted capital. Solana spot ETFs saw net inflows of $2.93 million, while XRP spot ETFs added $8.44 million. This divergence suggested capital rotation instead of risk reduction. Moreover, traders appeared willing to deploy funds into assets showing relative strength or clearer technical setups.

Solana Price Holds Key Weekly Support

Solana traded at $123.95, reflecting a 0.94% daily gain despite a mild weekly decline. Daily volume exceeded $3.09 billion, confirming steady market participation. With a market capitalization near $69.7 billion, SOL remained among the most actively traded assets.

Crypto Tony highlighted the importance of the $118 level, describing it as critical support. He noted that SOL approached a point where downside risk increased if buyers failed to defend that zone. Consequently, the market treated the current pullback as a structural test rather than a confirmed breakdown.

Technically, SOL retreated after failing to sustain momentum above the $135 to $140 resistance area. Price action showed lower highs, signaling weakening momentum. However, as long as $118 holds on a weekly basis, the broader range structure remains intact. Hence, upside targets near $135 and $150 stay technically valid.

Liquidity Zones Shape Short-Term Outlook

Umair Crypto offered a more tactical view, focusing on liquidity and volume levels. He observed a rejection near $129, aligning with anchored VWAP resistance. Price then moved into a confluence zone where the 50-day SMA met the point of control.

Source: X

Additionally, a bearish daily swing failure pattern emerged at support, often preceding liquidity sweeps. Umair Crypto noted that a close above $126 could trigger a move toward $132. That area likely holds stop losses from short positions. Consequently, a brief upside sweep could occur even within a corrective structure.