Solana Price Plunges 10% Despite Record $421M ETF Inflows: What Comes Next?

Solana Price Plunge: Why Monday's Drop Shocked Investors and What Comes Next

The crypto market delivered a rude awakening on Monday as Solana (SOL) tumbled sharply, catching many off guard despite record inflows into its U.S. ETFs. What caused this unexpected sell-off, and can traders anticipate a swift rebound or more pain ahead? Let's break down the key factors, technical signals, and potential price targets.

Massive ETF Inflows Masked Underlying Weakness

Just last week, Solana's newly launched U.S. exchange-traded funds (ETFs) attracted a staggering $421 million in net inflows—the highest among major cryptocurrencies. This capital surge stood in stark contrast to the broader market, where Bitcoin (BTC) alone saw $946 million in outflows. Other altcoins fared even worse, highlighting Solana's appeal to institutional investors.

Whales—large holders controlling significant SOL supplies—continued their accumulation spree, scooping up tokens amid retail fear. This institutional confidence suggested SOL was undervalued relative to its total value locked (TVL) in decentralized finance (DeFi) protocols. Yet, price action told a different story. Bears seized control, driving SOL down over 10% in a single session. The disconnect raises a critical question: Can bullish fundamentals override bearish technicals, or is this the start of a deeper correction?

Technical Breakdown Signals Persistent Selling Pressure

Solana's 1-day chart reveals a classic bearish setup. Following an early October impulse drop, bulls defended the $170-$180 demand zone, forming what appeared to be higher lows. However, this proved deceptive—a symmetrical triangle consolidation pattern emerged, trapping optimistic traders.

Key indicators flashed red:

On-Balance Volume (OBV) trended steadily lower, confirming sustained selling despite ETF hype.
Money Flow Index (MFI) failed to breach the 50-level, indicating weak momentum and capital inflows favoring shorts.
The recent breach of the $168.80 swing low from October 10 invalidated any bullish structure.

Monday's plunge tested the $156.65 support from July, with prices briefly dipping toward $145-$150—a psychological and historical demand zone from late June. This area could act as a bounce point if buyers step in aggressively.

For short-term traders:

Resistance: $163-$170 (Monday's range highs).
Support: $150 immediate; $145-$155 broader zone.
Lower timeframe charts show potential for a relief rally if SOL reclaims $163, but failure here could accelerate losses toward $130.

Whale Accumulation vs. Market Sentiment: A Tug-of-War

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Solana's ecosystem remains robust. Its high-throughput blockchain powers thriving DeFi, NFT, and meme coin sectors, with TVL exceeding $10 billion. Recent upgrades have addressed past network congestion issues, boosting developer activity and user adoption. ETF approvals have further legitimized SOL as a "Ethereum killer," drawing traditional finance players.

Yet, macro headwinds loom. Rising interest rates, regulatory scrutiny on crypto ETFs, and Bitcoin's dominance during risk-off periods often drag altcoins lower. Solana's correlation with BTC remains high at around 0.85, meaning any further Bitcoin weakness could amplify SOL's downside.

Adding to the intrigue, on-chain data shows whales holding over 1 million SOL increased their positions by 5% last week. This contrasts sharply with retail wallets dumping holdings below $10,000. If institutions double down at current levels—around $160 as of November 5, 2025—the dip could indeed be a buying opportunity.

Swing Trading Strategies Amid Volatility

Aggressive traders might eye long positions near $150 with tight stops below $145, targeting a retest of $170. Risk-averse investors should wait for confirmation: a daily close above $163 with rising OBV would signal reversal potential.

Conversely, bears can short breakdowns below $150, aiming for $130-$135. Use leveraged positions cautiously—Solana's volatility often exceeds 5% daily.

Broader Implications for Altcoins

Solana's drop underscores a harsh reality: ETF inflows guarantee short-term price stability only if matched by retail enthusiasm. As Bitcoin hovers near all-time highs, altcoin rotations could favor SOL in a risk-on environment. Monitor upcoming Fed decisions and crypto regulatory news for catalysts.

In summary, Monday's surprise plunge stemmed from technical breakdowns overriding fundamental strength. While $145-$150 offers strong support, a sustained rebound requires institutional buying to overwhelm sellers. Traders should stay nimble, combining on-chain metrics with price action for informed decisions. With Solana's ecosystem evolving rapidly, this dip might separate long-term believers from short-term speculators.