In-depth reveal of Solana's bottom code: Trump's support + BlackRock's ambush, is Sol at $118 the last chance for retail investors to get on board?

1. Divergence between price and value: the strategic significance of the $118 support level from a technical perspective

During the crypto market turmoil in the second quarter of 2025, the downward trajectory of Solana (SOL) triggered market panic. The price fell from the high of $250 in January to the key support level of $118, a drop of more than 50%, and the market was full of pessimistic arguments that "Solana is dead". However, historical data and on-chain indicators reveal that this panic selling is precisely the golden opportunity that value investors are waiting for.

From a technical perspective, SOL's weekly chart is showing a classic double bottom structure. The historical low of $115 in September 2024 and the current $118 form a strong support range, which coincides with the 100-week moving average.

According to historical cycle data, Solana's average return rate in the 12 months after touching the long-term moving average is 420%. What is more noteworthy is that the current SOL/BTC exchange rate has fallen to 0.0018, close to the bottom level of the bear market in 2023, which means that its value relative to Bitcoin is seriously underestimated.

On-chain data further confirms the approach of the bottom. Glassnode data shows that the proportion of addresses holding SOL for more than 1 year has risen to 63%, a record high, while the proportion of unrealized losses of short-term holders (holding time <1 month) has reached 78%, which is in an extreme surrender range. This "diamond hand" phenomenon of the holder structure often indicates that the market is about to bottom out and rebound.

In addition, the funding rate in the derivatives market has turned negative, and the position of perpetual contracts has dropped sharply by 40%, indicating that the leveraged longs have been cleaned up and the market has entered a "unleveraged naked run" state, which is a precursor to the reversal.

2. Fundamental iteration: the resonance effect of ecological prosperity and network upgrade

1. The absolute advantage of technical performance establishes a moat

Solana's underlying architecture innovation gives it a unique position in the competition of public chains. The combination of the Proof of History (PoH) mechanism and parallel processing technology has achieved a throughput of 65,000 TPS, and the cost of a single transaction has stabilized at $0.00025, which is one thousandth of Ethereum. The Firedancer upgrade completed in 2024 will increase node performance by 10 times, completely solving the problem of early network congestion.

Currently, Solana's average daily active addresses have reached 1.2 million, a 300% increase from the low point in 2024, and the network utilization rate (daily transaction volumeheoretical capacity) is only 15%, leaving huge room for expansion.

2. DeFi Ecosystem Growth

Despite the price correction, Solana's on-chain activities are still expanding against the trend. DeFiLlama data shows that its DeFi total locked value (TVL) has reached $6.6 billion, accounting for 7% of the entire market,

DEX trading volume has surpassed Ethereum for three consecutive months. Head protocols such as Jupiter (average daily trading volume of $3.5 billion) and Kamino Finance (TVL $16.5 billion) have formed liquidity black holes.

3. The meme coin craze reconstructs the logic of value capture

Although the outbreak of multiple memes on Solana in early 2025 absorbed the liquidity in the market, causing the overall tokens of the current Solana ecosystem to fall sharply.

However, it can be found that there are still many memes that choose to be deployed on the Solana chain. Data shows that Pumpfun's own Swap transaction volume has remained above 200 million US dollars for many consecutive days.

This seemingly irrational prosperity actually implies deep-seated changes: Solana's low cost and high speed make it the best carrier of retail investor sentiment, and political theme tokens such as TRUMP have been publicly endorsed by politicians such as Trump, forming a new paradigm of "meme financialization", which is the best choice for project parties.

III. Funds and policies: dual-wheel drive of institutional entry and macro dividends

1. Strategic allocation of institutional funds

Traditional asset management giants such as BlackRock and Fidelity are accelerating the layout of Solana. SEC filings show that in Q1 2025, the proportion of SOL held by institutions jumped from 12% to 28%, and the cost of holding positions was concentrated in the range of US$120-150, which is highly consistent with the current price. What is more noteworthy is that the US Federal Strategic Reserve Program has listed Solana as a candidate asset, and the potential purchase scale may reach US$5 billion, which is equivalent to 12% of the current circulating market value.

2. Certainty breakthrough in the regulatory framework

The revision of the US Digital Commodity Consumer Protection Act (DCCPA) clearly classifies SOL as a "digital commodity", ending the years-long controversy over securities attributes. At the same time, the compliance process under the EU MiCA framework has accelerated, and institutions such as Visa and PayPal have chosen Solana as the stablecoin settlement layer, and the proportion of PYUSD issued on its chain has reached 58.3%. The elimination of regulatory risks has cleared the way for large-scale entry of institutional funds.

3. Geopolitical risk aversion demand

The current global macro-economy is experiencing the resonance of "de-dollarization" and "re-inflation". The Czech central bank has announced that it will allocate 5% of its foreign exchange reserves (about $7 billion) to Bitcoin and Solana, setting a precedent for sovereign funds to hold smart contract platform tokens. Solana's high performance makes it a bridge between traditional finance and the crypto world, showing unique advantages in scenarios such as cross-border payments and treasury bond tokenization.

IV. Cycles and valuations: the path of outbreak revealed by historical laws

The cyclical laws of the crypto market show that Solana is at a critical node in the "despair-hope" transition. Comparing historical data, we can find that:

2020-2021 cycle: SOL rose from $1 to $260, an increase of more than 200 times, and the core driving force was the rise of DeFi and NFT ecology;

2023-2025 cycle: The current price has only risen 10 times from the low point in 2024, far from the previous cycle, and the ecological scale (TVL, number of developers, institutional holdings) has expanded 5-10 times.

According to the Bloomberg industry research model, Solana's Metcalfe ratio (network value/squared active addresses) is 0.17, significantly lower than Ethereum's 0.35, and the undervaluation is 52%. If compared with Ethereum's valuation level, the reasonable price of SOL should be $580, which has a 390% upside compared to the current price.

From the perspective of capital rotation, the spillover effect after the approval of Bitcoin ETF has not yet fully emerged. Of the $38 billion that flowed into the crypto market in Q1 2025, only 12% was allocated to smart contract platforms, far lower than the historical average of 35%. As institutional investors shift from "BTC-ETH" binary allocation to diversified layout, Solana will become the biggest beneficiary. Matrixport predicts that SOL is expected to break through $1,200 in 2026, and its market value will move towards $1 trillion.

V. Risks and Strategies: How to Seize Bottom Opportunities

Tactical Responses in Short-term Fluctuations

Although the medium- and long-term prospects are bright, investors need to be wary of market fluctuations. It is recommended to adopt the "core + satellite" strategy:

Core position (80%): build positions in batches in the current price range (US$115-130), and set the stop loss at the weekly support of US$100;

Band position (20%): participate in short-term transactions of SOL ecological meme coins (such as TRUMP, BODEN), and use 5-10 times volatility to increase returns.

Conclusion: Dawn in the Dark

When the market is shrouded in fear, real value investors see historical opportunities. Solana's technical barriers, ecological vitality and capital siphoning effect are forming a rare resonance of the "impossible triangle" in the price range of US$118. This is not only a strong support level on the technical side, but also a triple bottom on the fundamentals, capital and emotions. For investors with risk tolerance, Solana is no longer a simple token at this moment, but a ticket to the next era of encryption.