Key Insights
- •On-chain insights suggest Solana liquidity has thinned to levels typically seen in a bear market.
- •Institutional capital continues to pour into spot Solana ETFs, which have seen $17.72 million in net inflows this week, almost matching last week’s $20.30 million.
- •Roughly $500 million in long positions could be exposed if the price slips just 5.5%.
On-chain insights suggest Solana’s liquidity has thinned to levels typically seen in a bear market. According to a top analyst, roughly $500 million in long positions could be exposed if the price slips just 5.5%.
Meanwhile, Bitcoin’s mid-week buying burst lifted most major altcoins. Even so, Solana isn’t sharing in that confidence.
Its liquidity continues to pull back, and the overall market remains uneasy, leaving the token on fragile footing despite the recent lift across the sector.
Solana Realized Losses Outpace Profits as Liquidity Shrinks
Solana’s 30-day average realized profit-to-loss ratio has remained below one since mid-November, according to a Wednesday tweet from on-chain analytics platform Glassnode.
A ratio under one shows that realized losses are outpacing profits. This suggests liquidity has contracted to levels typically seen in a bear market.
A tweet by Altcoin Vector pointed out that Solana is undergoing a full liquidity reset. This signal has marked the start of new liquidity cycles in the past and often leads to bottoming phases.
If the current pattern mirrors April’s setup, a market reignition could take about four more weeks, potentially lining up with early January.
The reset is being driven by several factors. Realized losses are prompting sell-offs, futures open interest is declining, market-makers are pulling back, and liquidity is fragmenting across trading pools.
The mid- to long-term outlook for the market remains slightly bullish, particularly if macroeconomic pressures ease. In the near term, however, conditions are volatile.
Bullish Support Builds Amid Liquidity Risks in Solana
SOL price is showing signs of structural bullish support as investors step in following the recent downtrend. At the same time, rising leverage poses a risk of liquidations, keeping the market on edge.
The support is taking shape in two clear ways. First, Solana is flowing steadily out of exchanges, reducing the supply available for immediate selling.
Second, capital continues to pour into spot Solana ETFs, which have seen $17.72 million in net inflows this week, almost matching last week’s $20.30 million, according to SoSoValue data.
This environment creates an opportunity for strategic accumulation and network upgrades, strengthening long-term resilience and encouraging innovation across the Solana ecosystem.
Despite underlying buying support, leverage in the market remains tense.
Bitcoin’s lackluster price movement and sharp liquidation spikes show that leverage is still high across the crypto space. Over the past 24 hours, $432 million in positions were liquidated, according to CoinGlass data.
Solana (SOL) price rose 3.2% in the same period, according to CoinGecko. Yet $15.6 million in Solana positions were forced to close, making it the third-largest liquidated asset after Bitcoin and Ethereum.
The recent spike in liquidations came after Bitcoin’s rebound. Still, $500 million in long positions could be wiped out if Solana falls to $129, about 5.5% below its current price of $137.
A drop to that level would trigger a cluster of long liquidations. Lee said this would signal a healthy market reset, clearing excess leverage and setting the stage for renewed institutional inflows.
Such a move could strengthen Solana’s rebound in the weeks ahead. On the other hand, a near 3% rally could trigger $110 million in short covering. This would add momentum to the recent SOL price bounce and amplify buying pressure.