At present, the Solana ($SOL) market is moving through a phase of unmistakable uncertainty. Long-term holders are seeing a significant portion of their invested capital sitting underwater.
Using data from Glassnode’s Net Unrealized Profit/Loss indicator, we can see that sentiment has entered a state of fear. This is a signal that, in previous instances, has indicated either a sharp increase in accumulation or some other form of price reaction in the near future.
Solana is at present not able to achieve those previous high marks. Many people are watching closely to try and see what it is indicating, if anything, about market direction. All this is occurring alongside growing trader optimism that a spot Solana Exchange-Traded Fund (ETF) could be imminent, with Polymarket traders saying there’s an 85% chance for such a creature to exist by 2025. If that happens, it could really pump the price. But is that what we’re seeing now? Or are we just seeing the market pump in anticipation of approval?
Polymarket traders are betting big on a spot Solana ETF—pricing in an 85% chance of approval in 2025.
Is the market ahead of the curve, or is this just wishful thinking? 👀 https://t.co/0b0WAsKL24 pic.twitter.com/DseQid9R7d
— Kyledoops (@kyledoops) March 25, 2025
A Critical Moment for Solana: Fear and Unrealized Losses
Once hailed as a high-speed, low-cost alternative to Ethereum, Solana has had a rough stretch in the market. The NUPL indicator, which tracks the balance between unrealized profits and losses of a network’s holders, now shows that a pretty large portion of $SOL holders are underwater. That’s a pretty big deal for Solana, considering that the last time it held a rally prior to this apparent downturn, quite a few net new investors had come on board and had started buying. Now, those are the people who seem to be the most net long on Solana, and they’re the ones really holding onto what are pretty apparent losses.
Previously, times characterized by high amounts of unrecognized losses tended to lead to one of two results. They sometimes produced accumulation phases, which are periods in which market participants recognize that a discounted asset presents an extraordinary buying opportunity. They sometimes produced price rallies, which are what happen when assets start looking good to enough participants that they start buying those assets again. Solana being at a potentially pivotal price point could be related to either of those two possibilities.
Solana Market Update 🚨
Glassnode’s NUPL indicator is flashing ‘fear’—long-term $SOL holders are deep in unrealized losses.
Historically, moments like this have led to one of two things:
🔥 Big accumulation before a rally
❄️ More pain if buyers don’t step inWill SOL find… pic.twitter.com/6JM3AK0uqZ
— Kyledoops (@kyledoops) March 25, 2025
On the other hand, if buying pressure does not show up, the market may suffer more. Selling from underwater investors could still push prices lower, especially if there is no new buying interest in $SOL. Continued price declines could push the Solana ecosystem deeper into a bear market. As with any asset, sentiment is a critical driver of price, and Solana’s future trajectory seems destined to zigzag up and down based on how fear-filled or exuberant the community around it feels.
Solana ETF Speculation: A Potential Catalyst?
In a market that is largely filled with uncertainty, there is one source of optimism: the possible approval of a spot Solana ETF. Traders on the Polymarket betting platform now give an 85% chance that such an ETF gets approved before 2025, and this is certainly a growing sentiment among members of the Solana community in light of the recent overall market being more bullish.
The idea of a Solana ETF has built quite a bit of traction behind it. An ETF would let institutional folks buy into the $SOL without having to buy the cryptocurrency itself—nebulously “owning” the thing through the fund structure. This, in turn, could signal a (possibly increased) wave of institutional capital surging into Solana’s ecosystem, and, as lore has it, might boost the token’s “legitimacy” and liquidity.
The question, however, remains whether this optimism is premature. While an ETF could be a major catalyst for the token’s price, we must remember that the approval process for such products is never certain. Regulatory hurdles and market conditions might delay or stop altogether the approval of a Solana ETF. Furthermore, while the market has shown considerable interest in Ethereum ETFs, the approval of a Solana ETF would be a first for the Solana ecosystem, and the success of such a product is still an open question.
Despite all this, traders appear to be pricing in at least a decent chance the ETF will be approved. And if it is actually OK’d in the next couple of years, that very well might lead to an immediate bump in Solana’s token price, given how associated with the Ethereum alternative that network is right now.
What’s Next for Solana?
“The next few months remain cloudy for Solana, with key factors likely to influence its price action.”Why? There could be two reasons. One is the sobering possibility that if the current sentiment does not turn around, and if the selling pressure does not abate, then Solana and perhaps the whole crypto market could face significant downside. Not just in the short term, but also in what some might call a crypto winter. The alternative is the market could have reached a point of maximum fear. And in that case, it could be setting up for a period of accumulation.
Hope is in sight for Solana long-term investors as we could see a Solana ETF getting approved by 2025. The result of this approval would mean that Solana could experience some sort of boost in its price and market perception, mainly because ETFs are more readily accessible and consequently more impactful than direct investments by institutions.
At present, Solana holders and potential investors need to keep a close watch on the market sentiment and be ready to react to whatever direction the market may take. Whether the fear represents a market bottom that is signaling a time to accumulate or whether it foretells further downside is still an open question. In either case, Solana’s long-term potential will ultimately depend on whether the project can come through this period of adversity and emerge on the other side.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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