Solana Falls Below $120: Activity Slows, But Whales Step In

The cryptocurrency market is experiencing short-term volatility, leading to reduced activity on various blockchain networks, including Solana. Despite this, some investors, particularly large holders or "whales," are taking advantage of lower prices to buy in. As Solana's activity dips, ETF data shows institutional interest remains strong, partially offsetting selling pressure.

Key Takeaways

Solana's price dipped below $120 amid decreased market activity and increased fear.
Whale accumulation was noted as large holders bought during the price dip.
Solana ETFs saw $11 million in net inflows, indicating institutional support despite price drops.
Technical indicators suggest that Solana is holding a support zone, raising questions about future momentum.

Solana drops to $117 amid fear, but buyers step in – What’s next?

Main Content

Recent trends show that strong blockchain networks continue to attract investment despite short-term instability in the cryptocurrency market. While some blockchain activities have declined and essential support levels have been broken, retail participation has also diminished due to market fears. However, Solana has shown resilience as one of the more robust Layer-1 chains during these times.

Solana Network Revenue Trends
Source: Token Terminal

Solana's [SOL] revenue peaked in January but has since fallen to its lowest numbers of the year. This decline coincides with decreased trading activity in decentralized applications. Rather than being a signal of structural weakness, this downturn aligns more closely with heightened fear in the markets.

Additionally, the number of Weekly Active Addresses has also trended downward, reflecting a risk-averse approach among retail investors. As volatility has lessened, activity has stabilized at these lower levels.

Whale Accumulation Below $120

On December 18th, as Solana's value fell under $120, whale accumulation increased among various wallets. One prominent wallet, G6gemN, purchased 41,000 SOL valued at around $5 million during this dip. This buying behavior indicates a strategic approach to capitalize on the price drop rather than simply reacting to market fears.

To provide some context, this same wallet had previously accumulated 24,528 SOL at around $122, later selling it for approximately $175, earning a profit of about $1.28 million. This new accumulation reflects a trend where weakness in price attracts buying interest rather than triggering widespread selling among these large holders.

ETF Inflows Counteract Selling Pressure

On the same day, Solana ETFs recorded $11 million in net inflows, illustrating that institutional investment products are continuing to absorb supply despite falling prices. These ETF investments have helped to counterbalance the selling pressure present during this recent slump.

ETF Inflows Data
Source: X

The activity suggests that institutions are willing to accumulate assets in times of high volatility, reinforcing demand even during short-term downturns.

Support Levels Hold Steady

At the time of writing, Solana traded around $124 after a recent dip between $122 and $117. Support levels in this range were defended by buyers, allowing prices to recover and remain within the broader accumulation range of $122–$145. This action indicates a process of absorbing sell orders rather than continuing a downward trend.

Solana Price Action
Source: TradingView

Technical indicators also showed some positive signs. The MACD indicated a developing bullish crossover, while the RSI indicated a bullish divergence as selling pressure decreased near recent lows. This momentum reassured traders who were monitoring the potential for support holding steady amid an increasingly stabilized market.

Final Thoughts

While Solana faces short-term challenges, the increased activity from whales and institutional investors suggests that confidence in the network remains intact. As the market adjusts to current conditions, the key question is whether these support levels can hold and allow for potential recovery in sentiment.