Tokenized gold recently reached record trading volumes amid ongoing tensions between the United States and Iran. In fact, it would be 290% higher than the previous record. Tokenization could be one of the biggest winners from the CLARITY Act.
As a result, Solana (SOL) could be a winner. AMBCrypto recently argued that its fast network and strong blockchain infrastructure would allow it to capture a significant share of tokenization volume.
Institutional bets on Solana have increased in recent times. Strong ETF inflows and greater traction in the payments sector, combined with the CLARITY bullish thesis for the altcoin, provide a solid bullish foundation for long-term investors.
And yet, a long-term conviction does not negate the fact that the market is currently going through a difficult bear market. Deeper price declines could be likely for assets across the market.
On-Chain Signals Show Selling Pressure on Solana
Source: Glassnode
The biggest sign in favor of the bears was Coin Days Destroyed. The metric allows you to know if long-dormant parts are moving in large numbers.
It saw a massive spike on March 5, just as the price was testing the $90 resistance level.
Source: Glassnode
The increase in token movement has been accompanied by an increase in exchange flows over the past month. In itself, increased capital flows hint at the potential for selling pressure. The capitulation below $100 towards the end of January precipitated this trend.
Combined with the CDD spike, this hints at an impending wave of selling that SOL traders should be wary of.
Source: Glassnode
Finally, the HODLer net position change metric tracks long-term holder behavior. Since December, the metric has shown HODLers accumulating, which is reflected in the green bars of the histogram.
However, it has turned negative over the past few days – evidence that long-term holders are cashing out their SOL. This could be another mark of confirmation of the already bearish SOL price action.
Overall, Solana’s near-term momentum would be unlikely to exceed $100. Instead, it seems increasingly likely that holders will take advantage of this move to take profits.
Final summary
- Solana has strong fundamentals and its fast blockchain status means it could see sustained growth in the tokenization of real-world assets on-chain.
- While multi-year conviction remains strong, it does not negate current bear market dynamics.
