Solana Long Term Holder Capitulation Reaches 3-Year High As Price Nears Losing $80

Core Insights - Solana's price is under sustained pressure, continuing a three-week downtrend with SOL trading near $80, indicating weak investor support and bearish macro conditions [1][12] - The profitable supply of Solana has fallen to 15%, the lowest level since November 2022, suggesting that most holders are currently underwater [2] - Long-term holders (LTHs) are showing signs of weakening conviction, with increased token movement from dormant wallets indicating distribution rather than accumulation [7][8] Market Conditions - The current market conditions differ from historical stabilization phases, as broad market weakness and deteriorating long-term holder sentiment limit the usual recovery effect [3] - A sustained rise in Liveliness, which measures long-term holder activity, indicates eroding confidence and can amplify bearish trends [8] Long-Term Holder Behavior - Signs of LTHs selling became evident in late January when the Net Unrealized Profit and Loss (NUPL) fell below zero, marking capitulation and aggregate losses for long-term holders [9][10] - The last occurrence of LTH's NUPL dropping below zero was in May 2022, which led to widespread distribution before stabilization [10] - The delay in the spike of Liveliness after LTHs capitulated suggests that holders initially waited for a rebound, but ultimately sold as prices continued to decline [11] Price Trends - Solana's price remains within a defined downtrend, holding just above the $79 support level, with sustained weakness in investor demand increasing the risk of a breakdown below this threshold [12]