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- A significant amount of Solana (SOL) appears to have changed hands from “old long-term holders to new long-term holders” as profit-taking sent the asset on a massive decline.
- Data shows that investors who held the asset during the previous bull cycle have liquidated their positions, with holdings decreasing from 45% of the circulating supply in June to less than 5%.
Solana (SOL) struggles to bounce back to secure a new all-time high since declining from its peak of $263 on November 23. Currently, the asset is trading at $214 as it has declined by 2% in the last 24 hours and 5% in the last seven days. However, analysts anticipate an impending bull run as on-chain data shows persistent confidence by holders.
Analyzing Glassnode data, CNF discovered that medium-term holders whose assets are locked on the network have increased to 27% of the total supply. Specifically, these are investors who have maintained their positions between six to 12 months.
Analyzing the holdings of investors who have held the asset between one and two years, we discovered a significant decrease from 48% of the total supply in June to less than 5% now.
According to our observations, this category of holders is from the previous bull cycle, which took advantage of the recent rally to take profits. Fortunately, Solana’s supply is now in the hands of new optimistic investors. This transition also indicates a shift in sentiment around SOL as the asset changes hands from old long-term holders to new long-term holders
Another Analyst Provides a Bearish Perspective of Solana (SOL)
Providing a different argument for the recent underperformance, an analyst identified as Chris Burniske believes that market participants are negatively reacting to the build-up to the token unlock event, which is set for March 1, 2025. According to our research, 11.2 million SOL tokens ($2.6 billion), representing 2.3% of the current supply, would be released. In this case, the market has already priced in the event as it appears trapped in a bearish descending triangle pattern.
Adding to this, the SOL price has been held at the 26 EMA, which is currently at around the $215 level. Fascinatingly, failure to secure a position above this level could see SOL declining to the 200 EMA at about $194 or even around $172 support zone.
Historically, large unlocks force the market into corrections as sellers usually liquidate their positions to avoid a future drop in price. In the long run, SOL could sail through, according to Burniske. Per his observation, the asset would be able to mitigate the situation via its expanding user base and robust ecosystem. Any upsurge above the $225 level could invalidate this bearish thesis. Until then, investors are advised to exercise caution.
Meanwhile, famous analyst Ali Martinez believes that SOL could surge to $4000. His prediction was influenced by the formation of a Cup and Handle chart pattern, which is usually associated with a bullish trend.
Fascinatingly, a 20X surge would send Solana’s market cap to $2 trillion. According to Martinez, SOL would first make a huge leap to $600 but would hit $420 by Christmas, as we recently reported.
