Solana's price is under heavy pressure and continues to decline for three weeks due to weak investor support and poor macro conditions.
SOL is trading near 80 USD, indicating reduced demand in the cryptocurrency market. Moreover, long-term investors are now showing weaker confidence.
Solana's profitable supply is falling to the lowest level in several years
On-chain data shows that Solana's supply in profit has dropped to 15%. This is the lowest level since November 2022. When profitable assets decrease, it often means that most investors are back, which usually reduces the willingness to sell more.
Historically, such low returns have led to stabilization. Selling pressure usually decreases when fewer investors are in profit. But the situation is different now as the market is weak and long-term investors' confidence is diminishing, limiting typical recovery opportunities.
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An important metric that shows change is Liveliness, which measures the activity of long-term holders. The recent increase in Liveliness indicates that more tokens are moving from accounts that have been inactive for a long time. This development suggests that Solana LTHs are now selling off instead of accumulating during the decline.
When long-term investors start selling, the trend for the entire market usually weakens further. Their participation often indicates strong conviction. A steady increase in Liveliness shows decreased confidence, which can reinforce negative trends and reduce the chances of a quick recovery of the Solana price.
Signs that long-term investors are selling became clear towards the end of January. NUPL, which represents long-term investors' unrealized profits and losses, fell below zero. This means they have given up and now have accumulated losses.
The last time Solana LTHs' NUPL fell below zero was in May 2022. At that time, selling spread quickly before the situation stabilized. When long-term investors sell at a loss, it often indicates mental exhaustion rather than strategic reallocation.
Long-term investors gave up on January 24, but the increase in Liveliness came about a week later. The delay indicates that they were waiting for a turnaround. However, as the Solana price continued to fall, they still chose to sell. If this continues, the chances of recovery may become even worse.
The decline of the SOL price continues
Solana price is trading near 80 USD and remains in the downward trend that started three weeks ago. SOL is holding just above the support level at 79 USD. If investor demand remains weak, the risk of the price falling below this level increases.
If long-term selling continues and the trend persists downward, SOL may lose support at 79 USD. A confirmed downward breakout will likely send Solana towards 70 USD, which corresponds to the 1,786 Fibonacci level. That area acts as the next significant technical support.
If long-term investors stop selling, the trend could strengthen. If SOL breaks the descending trend line and goes above the resistance at 88 USD, the recovery could happen faster. An increase towards 95 USD would invalidate the negative scenario and indicate new strength in the Solana price trend.
