Is Solana currently showing a "Bear Market" illusion? Old Wallets are being sold off and easily absorbed by the ETF, making the market structure more stable.

A seemingly bearish pattern has emerged on-chain for Solana (SOL): early holders have started to transfer old coins back into circulation, raising market concerns about Large Investors dumping. For example, Arkham Intelligence reported that a long-dormant Solana Address transferred approximately $40 million worth of 200,000 SOL to a CEX. However, CoinShares data shows that Solana investment products have attracted about $381 million in inflows this month, making SOL the top performer among institutional products, only behind Bitcoin and Ethereum. Analysts believe that these early sell-offs are being absorbed by regulated ETF funds, which not only have not weakened Solana but have instead strengthened its market structure.

On-chain data reveals: early holders are “distributing” old coins

In the past month, early investors in Solana who accumulated during the phase of market calm have begun to bring their held old coins back into circulation.

• Large Transfer Alert: This behavior often raises market concerns about potential dumping. CryptoQuant's data shows that large wallets have recently dominated the average spot trading volume on mainstream CEXs, indicating that well-capitalized seasoned investors are distributing their holdings.
• Positive Behavior: However, this behavior is not inherently bearish. In the history of Bitcoin, Ethereum, and Solana, seasoned investors are more likely to engage in dumping when liquidity improves rather than when it is depleted.

ETF Huge Inflows: New Buyers are Absorbing Supply

What sets this current cycle apart is that the ones absorbing this supply are a new class of buyers: regulated investment products.

• Institutional Capital Inflow: According to CoinShares' weekly digital asset fund report, Solana related products saw an inflow of approximately 381 million dollars this month, bringing the total inflow year-to-date to approximately 2.8 billion dollars.
• Beyond Most Altcoins: Despite a significant pullback of over 20 billion dollars in the market this month, Solana continues to perform well in institutional products, second only to Bitcoin and Ethereum.
• US ETF Boost: Grayscale's Solana Trust (GSOL) recorded a net inflow of 1.4 million dollars on its first day after conversion to an exchange-traded format. Bitwise's Solana Staking ETF (BSOL) performed even stronger, with an inflow of 69.5 million dollars on its first day and an additional inflow of 46.5 million dollars on the second day.
• Analyst Commentary: Bloomberg ETF analyst Eric Balchunas described the strong performance of BSOL as “a strong signal of institutional demand for Solana-linked products.”

Impact on SOL Price: Market Structure is Being Strengthened

The change in this ownership dynamic is strengthening the market structure of Solana, rather than weakening it.

• Stable Demand Locking: The selling from old wallets is being absorbed by longer-term regulated ETFs and institutional buyers. This reduces short-term speculative turmoil and locks in a more stable and programmatic demand.
• Price Resilience: This shift explains why SOL has been able to maintain in the range of $180 to $200 even as broader crypto volatility has intensified.
• Liquidity Absorption: The inflow of funds from BSOL and GSOL has acted as a continuous liquidity absorption pool, effectively tightening the available trading volume in the spot market.
• Deepening of the Derivatives Market: At the same time, Solana's open interest increased from less than 8 billion dollars to about 10 billion dollars, deepening its derivatives market. This provides space for Large Investors to de-risk without triggering significant price reactions.

Conclusion

Solana is undergoing a change of ownership, which is a positive evolution towards a more mature market structure. The supply from early holders is being absorbed by institutional capital with a longer investment perspective, providing a strong buffer for the SOL price and signaling a more stable price discovery phase. In the short term, SOL may continue to consolidate sideways, but downward pressure is decreasing, laying a stronger foundation for future gains. Investors should pay attention to whether the inflow of ETF remains strong to assess if this supply-demand balance can be maintained.

Disclaimer: This article is for news information only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make cautious decisions.