Community Trust ScoreVerified
Solana (SOL) has delivered a solid rebound this week, climbing nearly 9% amid a mild recovery across the broader crypto market. However, beneath the surface, signs of weakness are emerging as long-term and mid-term holders begin reducing their exposure. Despite short-term optimism, several on-chain indicators point to potential profit-taking and growing selling pressure.
Holders Begin to Sell the Rally
Glassnode data shows that long-term Solana holders have started trimming their positions following the recent uptick. Wallets holding SOL for one to two years saw their share of supply decline from 20.33% to 18.48%, while holders in the three-to-six-month range fell from 12.7% to 11.55% this month.
This shift indicates that early investors are cashing in on the recent price gains rather than expecting sustained upside. Such selling from conviction holders often signals a short-term cooling phase as supply pressure builds.
At the same time, retail traders appear uncertain, with many choosing to take profits instead of reinvesting. This collective caution from both long-term and smaller holders raises the possibility that Solana’s recent momentum may fade if fresh demand does not emerge soon.
Institutional Activity Remains Muted
The Chaikin Money Flow (CMF) indicator—used to track large capital movements—supports this cautious outlook. While CMF briefly turned positive on October 27, it quickly dipped below zero again, indicating limited institutional inflows.
Historically, Solana has benefited when big-money players stepped in to accumulate during market dips. However, the recent data suggests institutions are not actively adding to their positions, even with SOL’s discounted price relative to its 2025 highs.
Without strong inflows from large investors, Solana’s price recovery could lose strength. A sustained CMF reading below zero typically reflects a lack of buying conviction, which often precedes corrections in crypto markets.
Unless CMF climbs back above the 0.06 mark, analysts expect Solana’s recovery to remain shallow, potentially leading to another phase of consolidation or mild decline.
Hidden Bearish Signals on the Charts
Solana’s technical structure also raises concerns about short-term downside risks. On the daily chart, a hidden bearish divergence has formed—where the Relative Strength Index (RSI) makes a higher high while the price itself forms a lower high.
This divergence usually hints that momentum is fading and sellers may soon regain control. Between October 13 and October 30, Solana’s price pattern reflected exactly that behavior. While RSI climbed, suggesting stronger buying interest, the actual price movement failed to follow through—an early sign that the rally might be losing steam.
Currently, Solana trades around $197, just above the critical $192 support zone. A daily close below this level could confirm bearish momentum, potentially pushing the price lower to $182 and then to $161.
However, if the price manages to stay above $192 and close above $206 in the coming days, it could delay further downside. A move beyond $206 might even open a path to retest $237, a key resistance level that previously capped gains in early October.
On-Chain Indicators Support a Pullback Scenario
Beyond technical charts, on-chain activity shows weakening fundamentals. Active address count—a metric reflecting user engagement on the Solana network—has been flat for two weeks. This lack of new user activity suggests that network demand has not kept pace with price movements.
Additionally, trading volume across major Solana-based decentralized exchanges (DEXs) has slipped slightly since mid-October, signaling that speculative appetite may be cooling off. This combination of lower participation and reduced inflows adds to the bearish narrative.
The Solana ecosystem continues to expand, with projects like Firedancer and Alpenglow enhancing scalability and network efficiency. However, market behavior often diverges from long-term fundamentals in the short run, especially during periods of macroeconomic uncertainty and shifting liquidity.
Macro Factors Still Favor Solana’s Long-Term Outlook
Despite the current hesitation among holders, Solana’s long-term prospects remain robust. The blockchain continues to attract institutional interest, with Grayscale and Bitwise both launching Solana exchange-traded funds (ETFs) earlier this week. These listings could increase mainstream exposure and bring new liquidity to the asset over time.
Moreover, Solana’s developer ecosystem remains one of the most active in the industry, with strong growth in decentralized finance (DeFi) and non-fungible token (NFT) projects. Analysts at Galaxy Digital recently described Solana as a key player in the emerging “Internet Capital Markets” vision—a sign that institutional confidence in its technology remains high.
Still, markets often move in cycles. After a multi-week uptrend, short-term corrections are natural as early participants lock in profits. Once the selling pressure from long-term holders stabilizes and CMF turns positive, Solana could resume its upward trajectory.
What Traders Should Watch Next
For now, traders are closely watching the $192–$206 range. This narrow corridor will likely determine Solana’s next major move. A drop below $192 may accelerate short-term losses, while a breakout above $206 could signal renewed bullish momentum.
Investors should also monitor CMF readings, RSI divergence, and the behavior of long-term holders in the coming days. Any shift toward accumulation could indicate that the market is preparing for the next leg up.
Until then, Solana remains in a fragile recovery phase—up 9% weekly but facing internal selling pressure that could limit further gains.
