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- A whale has staked $22.85M worth of Solana (SOL) in three days, highlighting large-scale market movements.
- Solana’s recent price struggles, tied to Bitcoin’s performance, present two contrasting scenarios for its future trajectory.
Recent whale movements have drawn attention to Solana (SOL). According to Lookonchain data, a single wallet withdrew and staked 134,482 SOL (valued at $22.85M) from Binance over three days.
These transactions are a strong indicator of trust within the Solana network during the current price volatility. Staking at this scale normally stabilizes the token supply, but market sentiment is heavily weighing on SOL with external forces.
This whale withdrew another 47,154 $SOL($7.98M) from #Binance 10 hours ago and staked it.
In the past 3 days, this whale has withdrawn a total of 134,482 $SOL($22.85M) from #Binance and staked it.https://t.co/jPXp5mjB5n pic.twitter.com/QBZZb1S9pJ
— Lookonchain (@lookonchain) February 20, 2025
Currently, SOL is at a price of $173.22, down 11% over the last week. It is following a trend of a bearish overall market, with Bitcoin (BTC) also at the brink of key support levels.
A technical analysis of SOL shows that it broke down lately out of a pennant formation, completing the supply area between $155 and $165. It is a strong support area at the moment.
Two Scenarios Unfold for Solana
Current market conditions indicate two possible directions that SOL can go. Firstly, if the range of $155–$165 is sustained, then SOL can find support and generate demand at key levels. Traders have pointed to levels of $195 and $230, where demand activity can gain strength to initiate an upward trend.
Second, SOL could also face additional downward pressure if Bitcoin goes below its major support of $89K–$92K. In that instance, SOL could go below $150 with the area of $140 being a possible bottom.
Token Holder Rewards Drop as Solana Prioritizes Validators
Beyond market dynamics, Solana’s network economics have faced scrutiny following the implementation of Solana Improvement Document 96 (SIMD 96) earlier this year.
This update also shifted the priority fee distribution by providing a higher incentive to the validators within the network while reducing the burn value. With this update, the daily burn of SOL dropped to 1,000 tokens from 18,000, contributing to increasing the annualized inflation by 30.5%.
The change also affected token holder rewards. On-chain metrics indicate that the real economic value (REV) paid out to holders declined from 72% to 40.9% between Feb 3 and Feb 16, while the commissions to validators increased by 25.1% to 56.1%.
While the change was intended to discourage side agreements and enhance the network’s security, the inflationary effect is a concern for many.
SIMD 228 Proposes Dynamic Inflation Adjustment
Solana enthusiasts are looking forward to SIMD 228, a pending proposal introducing a dynamic inflation mechanism. Multicoin Capital partners Vishal Kankani and Tushar Jain submitted the proposed solution to modify the rates of inflation based on the levels of staking.
If the staked supply drops below 50%, inflation will rise to encourage staking; conversely, if staking exceeds 50%, inflation will decrease.
While SIMD 228 is a less skewed approach to handling inflation, its passage is pending. In the meantime, Solana is going to have a testing time handling market stress, the economics of the network that is altering, and the overall crypto trend.
