• 80% of Solana’s circulating supply is held at a loss, per Glassnode data, indicating a top-heavy market structure vulnerable to further declines.

• Solana is trading at $129.24, down 0.3% in the last 24 hours, according to CoinGecko figures.

• Solana ETFs have seen $719 million in positive netflows since launch, as reported by SoSoValue, supporting accumulation despite short-term pressures.

Solana holders underwater? Explore why 80% of SOL is in loss amid selloff risks, but ETF inflows offer hope. Stay informed on crypto market trends and avoid panic selling—read expert analysis now.

What is causing 80% of Solana holders to be underwater?

Solana holders underwater due to a sustained crypto market selloff has left nearly 80% of the token’s circulating supply in loss, as revealed by on-chain data from Glassnode. This top-heavy market structure, built during recent highs, is now contracting sharply, putting significant pressure on investors. Analysts note that such widespread losses heighten the risk of capitulation if prices continue to slide.

Why are analysts warning of potential panic selling in Solana?

The threat of panic selling in Solana stems from the high percentage of holders facing unrealized losses, which could trigger a cascade if prices breach key support levels. Illia Otychenko, Lead Analyst at CEX.IO, explained that investors seeking to break even might exit positions en masse during further drops, creating a “major liquidation zone.” According to CoinGlass data, $239 million in long positions would liquidate if Solana falls below $124.40, potentially accelerating the downturn. This scenario is compounded by Solana-focused treasury companies operating at an average mNAV of 0.6, which may force asset sales to cover costs, further fueling bearish sentiment. Otychenko emphasized that such dynamics often lead to fear-driven decisions, but disciplined holders should focus on fundamentals rather than short-term volatility. Expert insights from platforms like Glassnode underscore how these liquidations can cleanse overleveraged positions, setting the stage for eventual recovery once accumulation resumes.

Frequently Asked Questions

What is the current price of Solana and its short-term outlook?

Solana is currently trading at $129.24, reflecting a 0.3% decline over the past 24 hours based on CoinGecko data. Short-term pressures from the broader market selloff persist, but upcoming events like the Federal Reserve’s interest rate decision on December 10 could introduce volatility and potential upside if outcomes are dovish.

Are Solana ETF inflows a positive sign despite holder losses?

Yes, Solana spot ETFs have recorded $719 million in net inflows since their launch about a month ago, with no negative netflow days, according to SoSoValue data. This institutional accumulation indicates strong long-term confidence in Solana’s infrastructure and growth potential, even as retail holders grapple with underwater positions.

Key Takeaways

• Market Structure Vulnerability: Nearly 80% of Solana’s supply is underwater, per Glassnode, highlighting risks from a top-heavy distribution prone to panic selling.
• Liquidation Risks: A drop below $124.40 could wipe out $239 million in longs, as shown by CoinGlass, exacerbating downward pressure but ultimately cleansing leverage.
• Long-Term Optimism: Focus on Solana ETF inflows totaling $719 million, signaling institutional positioning for future growth amid temporary setbacks.

Conclusion

The current scenario with Solana holders underwater and looming liquidation risks underscores the challenges of a contracting crypto market, yet positive signals from ETF inflows and expert analyses point to underlying resilience. As Lawrence Samantha, CEO of NOBI, noted, “The current price is not a disaster warranting panic,” urging investors to prioritize institutional accumulation over daily fluctuations. With macro events on the horizon, including the end of quantitative tightening, Solana’s ecosystem remains positioned for recovery, encouraging holders to adopt a strategic, long-term view on this innovative blockchain.

Solana’s ongoing pressures reflect broader crypto trends, but data from sources like Glassnode and SoSoValue illustrate a market in transition. Nearly 80% of holders may be in loss, yet the absence of negative ETF netflows and predictions from platforms like Myriad—placing only a 4% chance on a new all-time high by year-end—suggest caution without despair. Otychenko from CEX.IO warns that treasury firms’ underwater positions could intensify selling, but Samantha counters that “we are not selling; we are positioning,” viewing liquidations as a reset for the next accumulation phase.

Looking ahead, a true bottom for Solana and the wider market would likely emerge when volatility subsides, leverage clears, and long-term buyers step in. Upcoming Federal Reserve decisions could catalyze shifts, potentially resolving the bearish narrative if comments avoid hawkish tones. For now, the weekend’s modest bounce offers a glimmer of improved outlook, reminding investors that Solana’s robust technology and growing adoption continue to underpin its value proposition.

Institutional interest remains a cornerstone of optimism, with Solana ETFs attracting steady capital despite retail woes. This divergence between short-term pain and long-term promise is common in crypto cycles, as Samantha explained: conditions are warming up, though not yet at the bottom. Holders facing losses should assess fundamentals—no fundamental failures are evident—rather than reacting to price alone. As the market navigates these headwinds, Solana’s path forward hinges on broader economic cues and sustained ecosystem development.