Interpreting Solana's Downward Cycle: From Whale Cash-Outs to Meme Boom Chain Reaction

Since the beginning of the year, Solana(SOL) has experienced sustained adjustment pressure, with the current price hovering around $122.04, a significant pullback from its all-time high. This wave of correction is not driven by a single factor but is the result of multiple forces at play.

Whales’ Early Positioning and Profit-Taking

On-chain data analyst Ardi pointed out a key phenomenon: major holders of SOL had quietly begun distributing their holdings months before the peak. The preemptive reduction by institutional and high-net-worth investors laid the groundwork for the subsequent price decline. From the peak of $293 to the current correction, this early positioning strategy has proven to be effective.

Divergence in Network Activity

Interestingly, retail investors’ participation remains stable, but on-chain activity of mid-sized wallets and institutional investors shows clear signs of decline. This divergence reflects differing attitudes among market participants—retail investors are still holding firm, while large funds are quietly withdrawing.

The Dual Impact of the Memecoin Boom

It is also important to note the impact of the memecoin ecosystem on SOL’s price. The launch of the $TRUMP token at the beginning of the year sparked a speculative frenzy, and the volatility of such high-risk assets directly affected the performance of mainnet assets. As recent meme tokens have collectively adjusted, Solana’s price has also come under pressure, with the correlation between them growing closer.

From on-chain performance, capital flows, to ecosystem hotspots rotation, SOL’s correction is no longer an isolated phenomenon but a microcosm of the entire ecosystem’s evolution.