Solana [SOL] has recently experienced a notable price pullback, dipping below critical support levels after a failed attempt to breach the $144 mark. This recent volatility has revealed a fascinating dichotomy in market behavior, with contrasting strategies employed by different participant groups.
Whale & Institutional Confidence Soars
Despite the recent price weakness, significant players are signaling robust long-term confidence in Solana. On-chain data reveals a prominent Solana whale strategically accumulating an additional 101,365 SOL, valued at nearly $14 million, from Kraken during the dip. This substantial acquisition boosts the whale's total holdings to over $84 million, with a considerable portion actively staked for yield, underscoring a strong conviction in Solana's future recovery. Concurrently, institutional demand remains unwavering, with Solana Spot ETFs recording net inflows for five consecutive days in December. These ETFs, which have seen only three net outflows since their October launch, are nearing the $1 billion milestone in total assets, demonstrating sustained institutional commitment even amidst price fluctuations.
Retail Selling Adds Downward Pressure
In stark contrast to the bullish moves by whales and institutions, retail traders have largely continued to divest their Solana holdings. Metrics like Spot Taker CVD and Coinalyze data confirm a trend of seller dominance in the spot market, indicating that retail selling is actively contributing to the downward pressure on SOL's price. This imbalance is further exacerbated by prevailing bearish technical indicators. The SMI Ergodic Indicator has shown a bearish crossover, and the tightening EMA and MA crossover suggests ongoing short-term selling pressure. These combined signals point towards potential sustained weakness, with SOL possibly revisiting levels below $130, eyeing $123 as the next significant support. For a bullish reversal, Solana would need to reclaim the EMA at $136 and firmly close above the $146 level that previously proved a barrier.
