Solana Faces Mounting Liquidation Risks With 80% of Supply at a Loss

Solana is facing the same intense selling pressure that has hit the broader altcoin market, and the strain is becoming increasingly visible on-chain.

New data from Glassnode shows that nearly 80% of all circulating SOL is now sitting at a loss, a sign that the market had become dangerously top-heavy before the latest downturn.

With such a large share of holders underwater, analysts warn that Solana could be vulnerable to capitulation. CEX.IO’s lead analyst Illia Otychenko told Decrypt that investors waiting to break even may choose to dump their positions if the price weakens further, potentially triggering a fast, cascading sell-off. CoinGlass data reinforces the threat: nearly $239 million in long positions will be liquidated if Solana slips below $124.40.

Read More:

Ondo Secures Europe-Wide Approval to Bring Tokenized U.S. Stocks to 500M Investors

For now, the token is hovering near $129, down roughly 1.4% over the past day, according to CoinMarketCap.

Still, some market participants argue that deep liquidations can be healthy. NOBI CEO Lawrence Samantha said large wipeouts often reset market structure and pave the way for a new accumulation phase once the forced selling subsides.

But another source of pressure may prolong the pain, just like how top meme coins fell. Otychenko noted that several Solana-focused treasury firms are struggling with underwater net asset values – averaging around 0.6 – leaving them exposed if prices fall further. In that situation, they may be forced to offload assets to cover operational costs, reinforcing bearish sentiment and amplifying fear-driven decisions at the worst possible time.