On-chain Data Shows Solana (SOL) Drops Below Realized Price

Solana (SOL) has faced a significant decline, with its spot value falling under the Realized Price for the first time in three years, following recent bearish trends.

Breakdown of the Realized Price

Data from on-chain analytics firm Glassnode indicates that Solana’s price is approximately 8% below its Realized Price, an indicator reflecting the average cost basis of investors on the network.

When the asset’s spot price exceeds this metric, holders enjoy net unrealized profits. Conversely, being below suggests that the average investor is at a loss.

Trend of the Realized Price for Solana

As illustrated, SOL exceeded its Realized Price in 2023, benefiting investors. However, a recent drop below this critical metric has raised concerns. Glassnode highlighted that “Solana just plunged below its Realized Price for the first time in nearly 3 years.” With the current exchange rate around 8% below this level, it suggests typical holders could be 8% in the red.

The last occurrence of this crossover in 2022 marked the onset of a bear market for Solana and might signal another downturn now.

The Realized Price has historically served as a boundary indicator for differentiating bull and bear markets, not only for SOL but for other digital assets too. Glassnode also provided insights into Bitcoin’s metrics, indicating potential ongoing struggles for short-term holders amidst broader bearish market actions.

Current SOL Price

As of this writing, Solana is trading at approximately $124, reflecting a nearly 9% decrease over the past week.

Featured image from Shutterstock.com, Glassnode.com, chart from TradingView.com