An unexpected chain of events saw Solana (SOL) take a sharp price drop and plummet 8% to $124 on Monday. That price drop now putting long-term holders in a position where not one of them has an unrealized gain on every single SOL they hold. It’s clear that SOL holders might be facing the first real substantial drawback in over a year. This price drop has many asking whether the appearance of underwater conditions for SOL holders might lead to a substantial sell-off in the near term. Solana’s Struggles and Potential Market Repercussions The steep descent in Solana’s price has placed a significant number of its typical holders in a situation where they are not making money. Right now, as the token consistently stays under the realized price, a lot of these holders might be contemplating the not-so-enviable decision of either keeping their fractional tokens or selling them off to try and salvage some semblance of value. Potentially, if too many of them go for the latter option, we could see Solana’s price get pushed down even more. This is closely being watched by traders because, if we’re not seeing too many of these holders decide to come out and sell, then Solana’s price is in a better position to potentially recover. Currently, the Solana market is exhibiting a bearish descending channel, with support levels at $120 and $115, according to the latest update from FXStreet. Should the price fail to hold above $120, or what could be termed the last line of defense before further selling pressure, the next support level is significantly lower at $115. On the flip side, if Solana manages to recover the $128 level with strong volume (which it has not done since the middle of October), a bounce back to the $134 key resistance level could commence. SOLANA DIVES BELOW COST BASIS — FIRST TIME IN 3 YEARS SOL plummeted 8% to $124 amid Monday's market bloodbath; this marks the first time since May 2022 that SOL trades below its realized price of $134. Average holders are now underwater, potentially triggering a sell-off wave;… pic.twitter.com/Q24OdFjFjY — IBC Group Official (@ibcgroupio) March 11, 2025 Current price behavior also reflects a broader sentiment in the market. The price of Solana, along with many other cryptocurrencies, has recently experienced volatility and moved in a downward direction. This swift movement has caused Solana to fall below its realized price, an unusual circumstance that has attracted the interest of many market participants, both retail and institutional. As a blockchain gaining significant attention due to its fast transaction speeds and low fees, it is no wonder that the price movements of Solana are now being closely watched. Whale Activity: Solana Withdrawals and the Impact on Price Besides the wider market conditions, recent activity by whales has also influenced the price change of Solana. In the last nine hours, a certain whale has taken 195,000 SOL—around $23.2 million—from major exchanges like Bybit, OKX, and Gate.io. Moves like this made by whales are often seen as signals of turbulent times for the market, since large holders can really shake things up when they take their assets somewhere new or decide they’re ready to let go. A whale has withdrawn 195K $SOL ($23.2M) from #Bybit , #OKX , and #Gateio in the past 9 hours. https://t.co/bNtKLjwoO9 pic.twitter.com/0xxcT7zAWv — Lookonchain (@lookonchain) March 11, 2025 A worry is intensified by a recent sale by another whale of 108,688 SOL for $12.2 million USDC at a price of $112.3—almost the very lowest point of the day. That transaction, however, was not of much concern to us because we know that it marked a loss of approximately $7.48 million for this whale, inasmuch as those tokens were withdrawn from Coinbase 11 months ago when Solana was trading more like $181. But it is a striking image, isn’t it? Large sales by large holders of a volatile asset clearly have the power to shift the market. And when they’re not just shifting it, but also clearly taking a substantial monetary loss, that’s got to be bad for sentiment. A whale sold 108,688 $SOL for 12.2M$ USDC at $112.3, almost at the lowest price today, with a loss of $7.48M! These $SOL were withdrawn from #Coinbase 11 months ago, when the price was $181. https://t.co/fb4QcvpKbY pic.twitter.com/WtZrhOixxS — Lookonchain (@lookonchain) March 11, 2025 The recent price drop of Solana and the significant withdrawal activity from large wallets signal that the cryptocurrency is presently in a state of uncertainty. Traders are keeping a close watch on the next price levels, seeking any hope of recovery signs. Meanwhile, sentiment in the market at large is not favorable, and much of this is bound to impact Solana’s price. Inflation Rate Proposal: Will It Help Solana Recover? Concerns about Solana’s price are growing, but another key development has emerged in the network’s governance. Validators are currently engaged in a vigorous debate about a new proposal that could reduce Solana’s annual inflation rate by as much as 80%. If this proposal passes (and there’s no guarantee it will), it could have major implications for the Solana ecosystem. The debate among validators has found its way to the proposal, which could be seen as a way to curb inflation and get the overall supply of SOL that newly validated blocks generate down. By limiting the number of new tokens entering circulation, the proposal could help support the price of SOL and also provide relief to holders. It has not been finalized yet and may go through a couple of rounds of discussion and voting before it does. Looking Ahead: What’s Next for Solana? With Solana trading below its realized price for the first time in three years, the future of the cryptocurrency seems uncertain. Now that holders are seeing the value of their assets dip, and with whales making large withdrawals, it seems that these conditions could lead to a further decline in the price of SOL if the market as a whole does not recover soon. The debate surrounding the inflation proposal is central to solving several problems and has the clearest path to potentially stabilizing the price of SOL. The new investors we want are most interested in the actual performance of our current projects, not just in the market cap of our token. The real performance of Solana is its future, and its inflation rate may ultimately be irrelevant to how that future plays out. At the same time, traders and investors keep a close watch on key support levels, whale activity, and overall market sentiment to assess whether Solana has any shot at recovering from its recent price plunge or if it’s just going to keep declining. And make no mistake: Solana has not moved itself into a very confident position in the overall cryptocurrency market. Its next moves are going to be very critical in determining which direction it’s going in, in part because it has so many next moves coming up. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
