TLDR:
The bearish trend in the Solana ecosystem has extended for the third consecutive week. Currently, the market is closely watching as the asset flirts with a drop representing the Solana price below $80, a critical psychological level that is testing the conviction of even the most veteran investors.
On-chain data reveals a panorama that concerns investors. The supply of SOL in profit has plummeted to 15%, a level not observed since November 2022. This suggests that the vast majority of holders are currently sitting on unrealized losses.
While low profitability sometimes precedes a stabilization phase, the current sentiment remains markedly bearish. Lack of institutional demand and adverse macroeconomic conditions are limiting any attempts at an organic rebound in the short term.
The Liveliness metric recently registered a spike, indicating that coins that remained inactive for years are now moving toward exchanges. This behavior confirms that Long-Term Holders (LTH) have shifted from an accumulation phase to one of aggressive distribution.
This capitulation became evident in late January when the Net Unrealized Profit/Loss (NUPL) indicator for these investors fell below zero. Generally, when high-conviction investors sell at a loss, the asset’s macro momentum tends to weaken significantly.
So far, SOL is barely holding above the $79 technical support, a zone of vital importance for bulls. If the selling pressure from large holders persists, the cryptocurrency is highly likely to seek liquidity at the $70 Fibonacci extension level.
It is worth noting that a recovery remains possible if the price manages to break above the descending trendline and reclaim $88. However, until long-term investor confidence is restored, any rally could be interpreted as merely an exit opportunity.
