Solana is navigating a challenging period in the markets, characterized by a liquidity squeeze and broader macroeconomic headwinds. As its price tests a crucial support threshold, a contradictory narrative is emerging behind the scenes: institutional investors appear to be strategically using the pullback to build positions. The key question is whether a bottom is forming or if another decline is imminent.
Institutional Accumulation Amidst Weakness
Despite the technically precarious price action, significant market participants are showing sustained interest. Solana-focused spot ETFs recorded net inflows of approximately $17.72 million this week. This trend suggests a divergence in sentiment between retail investors and larger institutions.
Concurrently, on-chain data reveals that large holders, often called “whales,” have accumulated holdings worth $28 million over the past 48 hours. These purchases are absorbing a portion of the selling pressure and indicate that well-capitalized actors may view current price levels as a long-term opportunity.
Network Activity Sustained by Memecoin Trend
Fundamentally, the network remains highly active, primarily driven by the memecoin platform Pump.fun. Estimates indicate the project’s cumulative buybacks have now reached nearly $195 million, effectively removing tokens from circulation. While trading volumes remain well below the peaks seen in Q1 2025, the number of daily token launches exceeded 25,000 again in December. This points to continued speculative demand within the ecosystem.
Should investors sell immediately? Or is it worth buying Solana?
Macro Fears and Liquidation Risks
The Solana price is currently struggling to stabilize above the $130 mark. With a weekly loss of nearly 10%, the asset is under noticeable pressure. Concerns regarding a “hawkish” interest rate policy from the U.S. Federal Reserve, coupled with thinning liquidity on the blockchain itself, are primary contributors.
Market analysts are warning of a potential “liquidity crunch.” A sustained break below the key support zone around $129 could trigger a chain reaction. The rationale is that long positions valued at over $500 million would face the threat of forced liquidation in such a scenario, which would massively amplify selling pressure.
All attention is now focused on the defense of the $129 support zone. A successful stabilization here would lend credence to the thesis of institutional accumulation. Conversely, a decisive break below this level could unleash further selling pressure through the feared liquidation cascade.
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