Solana (SOL) has witnessed a notable drop this week, falling below the $130 mark for the first time since early January. This price decline is part of a wider trend affecting numerous cryptocurrencies in the volatile market landscape.
Interestingly, despite this downturn, large holders, often referred to as whales, have been actively accumulating SOL. Those addresses holding between 1,000 and 10,000 tokens have collectively added around 48 million SOL to their portfolios since late November, making up approximately 9% of the total supply. This trend is indicative of a bullish outlook among significant stakeholders.
The appetite for accumulation is not limited to smaller whales. Addresses with a minimum of 100,000 SOL have also ramped up their holdings, increasing from 347 million to 362 million tokens in just over a month. These wallets now command a substantial 64% of the total supply, highlighting a strong concentration of holdings.
Long-term holders have returned to a buying mindset as well, with the net position change showing an accumulation of 3.85 million SOL on Sunday. This figure marks the highest level of accumulation in 15 months, reminiscent of previous instances that preceded significant price rallies.
In terms of selling pressure, current market data reflects decreased activity on exchanges. The balance of SOL on exchanges dropped to just over 26 million tokens, the lowest it has been since January 2023. This decline suggests that many holders are opting to keep their assets off exchanges, anticipating better future prices.
Market Dynamics: Liquidations and Active Participation
The derivatives market experienced considerable liquidation activity, with long positions worth $59.51 million being wiped out, contrasting sharply with a mere $1.42 million in short liquidations. This 42-to-1 ratio underscores that many traders had positioned themselves for upward momentum before the sudden price drop.
Meanwhile, open interest fell by 7.66% to $8.16 billion, a clear signal of turbulence in market sentiment. In contrast, trading volume surged, doubling to $13.37 billion. The combination of dwindling open interest with increasing volume typically points to forced liquidations rather than organic selling, indicating a potential correction in the market.
In addition to these dynamics, Solana’s daily active addresses have surged by 51% over the last week, climbing above 5 million. Transaction counts have also risen, with an average of 78 million daily transactions recorded, a peak not seen since mid-August.
The influx of stablecoins into the Solana ecosystem has reached an all-time high of $15 billion, representing a 15% increase just within the last week. This growth in stablecoin supply tends to enhance liquidity within the network, providing more resources for trading and application development.
Technically speaking, the Relative Strength Index (RSI) on the 30-minute chart has plummeted to 19.13, well beneath the oversold threshold of 30. Such extreme conditions often signal potential short-term price recoveries.
SOL has recently dipped below both its 20-day and 50-day exponential moving averages. After falling to a low of $133.42, some support is emerging, with the critical wedge lower trendline near $130 now serving as a potential support level to watch.
As the crypto community watches closely, it remains to be seen whether Solana can regain its footing above the $130 mark, or if current bullish sentiment among whales will translate into sustained upward momentum.
