SOL pressures on $75, Solana reviews inflation mechanism

Key Points

SOL has entered a narrow range of declining price structures after regaining Fibonacci support.

Two proposed changes would reduce new coin issuance and make token destruction more dependent on online activity.

The overall argument depends on the needs of buyers and Solana users; slowing supply growth alone is not enough.

Lower highs have pushed SOL into a narrow range

On August 15, SOL traded close to $75, less than 1% above the 0.382 Fibonacci retracement level near $74.5. Directly above, the declining blue trend line meets the 50-day simple moving average at around $75.9, and the 100-day simple moving average at $77. The distance between support and the top of the resistance band is less than $2.50.

It can be seen from the daily chart that since the high of just below $84 in early July, every rally has been blocked at lower levels, forming a falling blue resistance line. The other side of the structure gained support around $71.80. SOL returned to the zone twice in late July and early August, but sellers failed to keep it falling below that level.

The buyer then regained Fibonacci support and pushed the price back into the $76 region. The rebound stagnated below the downtrend line, and as the support and resistance levels gradually approached, the K-line physically narrowed. If the daily close stays above the entire resistance band, it will open up room for a 0.5 Fibonacci retracement level close to $79. The next resistance cluster is higher, between the 200-day simple moving average of $82 and the 0.618 Fibonacci level around $83.5.

If the closing price falls below Fibonacci support, it will erase recent gains and test the bottom of the horizontal triangle again. If this bottom falls, the $69 Fibonacci level of 0.236 will become the nearest marked support. Recently, the K-line crossed a nearby level and closed back into the range during intraday trading, so it was confirmed that it still needed to observe the daily closing price and subsequent successful backtesting.

Lower inflation will shift more sharply into network demand

Zach Pandl, head of research at Grayscale, estimates that if the changes under discussion are adopted, SOL's annual supply inflation rate could fall to about 1.1% by the end of 2031. His estimate is based on our analysis of Solana's proposal to slow SOL supply growth and involves two mechanisms.

Two proposals target different parts of the SOL supply

SIMD-0550 will reduce new coin issuance. It would increase the annual decline in Solana's inflation rate from 15% to 30%, and is expected to create approximately 18.9 million fewer SOLs over six years. The network will reach the circulation floor of 1.5% in the first half of 2029 rather than 2032.

SIMD-0553 will be destroyed at an increased cost. It proposes a resource-based fee that will be destroyed in full. At its terminal modeling rate, if network activity levels were similar to the May 2026 sample used by the author, the system could destroy 7,500 to 9,000 SOLs per day.

Together, these changes will push SOL's economic model away from relying on distribution to relying on use. Fewer tokens will be allocated through inflation, while stronger demand for network resources could result in greater destruction.

Why slowing supply growth does not automatically mean bullish

circulation will still exceed destruction. The proposal estimates that approximately 60,000 SOLs are currently in circulation every day, much higher than the predicted terminal destruction volume. The likely outcome is a slowdown in supply growth rather than an immediate contraction in supply.

The amount destroyed depends on network activity. Fewer transactions mean fewer tokens are destroyed, and resource-based fees, if they become too expensive, could inhibit some network use.

Pledge rewards will decrease. Unpledged holders will face less dilution, but pledgers and verifiers will receive fewer newly issued tokens. Their ultimate return will depend on the price of SOL, as well as whether fees and MEV (maximum extractable value) will be sufficient to make up for lost incentive revenue.

So, Pandl's price view is conditional: If demand remains stable, lower supply growth may help.

How the supply argument relates to the current contraction range

These two stories run on different timelines. The chart will determine whether the current recovery is sustainable, and the proposal-if approved-will determine how much SOL dilution slows in coming years. Lower circulation may improve the supply of SOL, but only continued network activity can generate meaningful destruction and compensate for lower pledge rewards. For now, charts are testing buying demand; while the debate on token economics is testing whether Solana can reduce its reliance on inflation without weakening participation.