Solana Struggles to Maintain Momentum as Investor Confidence Wanes

VISI.NEWS | BANDUNG - Solana, one of the leading altcoins, has struggled to maintain its upward momentum after reaching a peak of $206 on July 22. Over the past week, the cryptocurrency has fallen by 14%, signaling a decline in short-term investor confidence. Despite this, on-chain data suggests that Solana may be poised for a short-term recovery, as early signs point to a shift in sentiment that could trigger a rebound in the coming sessions.

Long-Term Holders Show Confidence in Solana

While short-term traders have liquidated their positions, long-term holders (LTH) are returning to accumulation mode. This shift in behavior is reflected in Solana's Liveliness metric, which has steadily declined since July 25. According to Glassnode, this metric—which tracks the movement of previously dormant tokens—reached a weekly low of 0.76 on August 2, confirming reduced selling activity among Solana's long-term investors.

What Is Liveliness?

Liveliness measures the ratio of “spent” coins to those that are accumulating, essentially reflecting whether long-term holders are moving their assets. A rising Liveliness indicates that more inactive tokens are being sold, typically as profit-taking by LTHs. Conversely, a declining Liveliness, as seen with Solana, suggests that more coins are being moved to long-term storage, signaling that holders are opting to wait rather than sell. Additionally, since July 30, Solana’s Net Position Change has shown consistent growth, further confirming that more coins are being moved into long-term wallets, despite the asset's lackluster price action.

Traders Selling at a Loss: Is the Bottom in Sight?

The continuing decline in Solana's Realized Profit/Loss Ratio supports a more optimistic outlook. Data shows that the ratio hit a 30-day low of 0.15 on August 2, indicating that many traders exiting their positions are doing so at a loss. Historically, markets tend to stabilize when the majority of participants are selling below their cost basis. With fewer holders willing to sell at a loss, selling pressure could ease, providing Solana with an opportunity to find a local bottom before a bullish catalyst potentially drives a rebound.

Solana Faces Critical Support at $158: A Turning Point?

As of the latest data, Solana is trading at $160.55, hovering above a key support level at $158.80. If buying pressure increases, SOL could begin a bullish reversal, pushing the price toward $176.33. However, should selling persist and support at $158 weaken, Solana's price could dip further to $145.90. @ffr