Solana (SOL) Exchange Supply Drops Amid Institutional Demand and Price Surge, Signals Bullish Momentum
Solana (SOL) has experienced significant shifts in both price and supply dynamics over recent months. Initially, SOL faced heavy selling pressure, with volumes reaching 1.26 million SOL and prices dropping below the $172 support amid institutional risk reassessment and broader macroeconomic uncertainty. However, the latest data shows a sharp 27.4% decline in SOL supply on centralized exchanges (CEXs) since March, now at 27.01 million tokens, approaching the lowest level since October 2022. According to on-chain analyst Murphy, this drop is driven by rising institutional interest, increased staking (over 64% of SOL is staked), whale accumulation, and enhanced DEX trading volumes, particularly following a surge in meme coin activity. The recent spot ETF filings by Grayscale, Fidelity, and Franklin have further boosted institutional demand, with a projected 90% approval chance in 2025 according to Bloomberg. Large withdrawals from exchanges such as Binance and Kraken hint that whales are shifting SOL holdings for long-term storage or on-chain use, reducing immediate sell pressure. The combination of dwindling CEX supply, increased TVL, and robust price action—SOL has risen over 15% in the past month to around $174—suggests a strong bullish foundation. Key resistance remains around $176, and a breakout here could drive further gains. Overall, while cautious short-term trading is warranted due to resistance zones between $162 and $176, the updated supply and demand trends for SOL indicate a bullish outlook for traders.
Bullish
The initial report highlighted a short-term price dip and bearish sentiment due to institutional risk-off moves and macroeconomic uncertainty. However, subsequent developments signal a strong bullish pivot: there is a steep decline in SOL supply on exchanges, which typically reduces sell pressure and can drive prices higher. Growing institutional interest, driven in part by spot ETF filings and increasing whale accumulation, reinforces this trend, especially as over 64% of the supply is now staked. The transition of tokens off exchanges and into DeFi or cold storage further diminishes immediate liquidity, historic indicators of upward price potential. Recent surges in total value locked (TVL) and DEX trading volumes, combined with price gains and the possibility of an ETF approval by 2025, strengthen the positive outlook. While resistance between $162 and $176 could cause short-term volatility, the predominant supply/demand metrics and institutional activity clearly favor a bullish trend in both the short and long term.