- Long-term Solana holders are showing signs of fear, but these are the moments when smart money steps in
- SOL hit a new ATH in network adoption, with 11.09 million addresses now holding the token
Solana’s (SOL) long-term holder Net Unrealized Profit/Loss (NUPL), alongside SOL’s price, indicated different emotional states through zones ranging from 0.1 to 0.65. This corresponded with capitulation due to panic selling across the board.
At press time, the emotion of fear reigned on Solana holders due to uncertainty, with glimpses of optimism due to the balance between gains and nerves. The NUPL rose to 0.6 in late January, marking belief levels of market confidence. However, it then fell to 0.3 in mid-February, triggering an optimism-anxiety phase of fear.
Source: Glassnode
The NUPL’s position in March hit hope-fear levels, while SOL maintained a price of around $120 and continued its downtrend from a peak value of about $280.
In fact, Glassnode’s data suggested that periods of fear have historically marked recoveries. These implied that savvy investors may buy SOL, hinting at some upside on the price charts.
Network adoption and volume
Despite the fear, however, all may not be lost. Especially as positive signals might be emerging with a record high number of 11,088,279 SOL wallets with balances of at least 0.1 SOL – Up from 10,986 million in mid-February.
This metric for adoption hit its highest point in mid-March, despite the altcoin’s price declining from $200 to $127.58. This divergence possibly stemmed from negative market sentiment and profit withdrawal.
Now, robust long-term belief has driven this hike as bigger SOL holders and new investors are coming into the market. This was confirmed by the uptick in network adoption.
Soure: Glassnode
The fall in price seemed to produce anxious reactions among users, hinting at unpredictable outcomes and doubts. If perceptions stay favorable, future adoption could push the price north.
Worth noting, however, that the prevailing market hesitation exists due to positive fundamentals.
Additionally, Solana received substantial cross-chain transfers, primarily from Ethereum and Arbitrum, among other chains. This data confirmed that SOL reclaimed its market share as it functioned as the main beneficiary of returning transaction volumes from cross-chain flows.
Source: deBridge
The massive inflows of blockchain assets to SOL, supported by its enormous scalability and minimal transaction fees, surpassed other chains.
SOL continues to maintain its position as the prevailing recipient of interchain traffic. As expected, this attracts more users, which leads to positive price dynamics.
Can the positive signs counter the fear in SOL’s LTHs?
The record-high network adoption, combined with strong cross-chain inflows, revealed Solana’s increasing confidence and scalability. Hence, it might do its part in reducing the anxiety of long-term holders. Fear-driven market conditions have historically paved the way for crypto price recoveries which may present an ideal moment to purchase.
The price decline indicated short-term market wariness, as well as temporary cautiousness. As far as bullish market factors are concerned, it’s still not clear whether they’ll be able to overcome market fear in the long term.
This makes it difficult to predict the outcome of this uncertainty between optimism and doubt. However, it can be expected to have some impact on SOL going forward.
