Solana (SOL) has cooled off after a red-hot August rally, with on-chain data suggesting that traders may face a longer wait before fresh upside returns.
Solana’s Rally Loses Steam
After climbing more than 26% in August and nearly 36% over the past three months, Solana’s price has flattened in recent days. Over the last week, SOL traded sideways and slipped about 1.1% in the past 24 hours, showing signs of exhaustion after weeks of strong gains.
The hesitation comes as profit-taking accelerates and institutional inflows show signs of weakening—two signals that could limit Solana’s ability to break higher in the short term.
On-Chain Data Signals Heavy Selling
As of September 3, nearly 95% of Solana holders were sitting on profits, close to a six-month peak. Even now, the reading remains elevated at 87%, which typically encourages investors to cash out gains rather than hold.
History supports this trend: Solana’s biggest rallies tend to occur when fewer holders are in profit. For example, when profit-taking cooled in early August and supply in profit fell below 54%, SOL surged from $158 to $214 in just three weeks—a 35% gain.
The HODL Waves metric, which tracks how long coins remain dormant before moving, also points to selling pressure. Short-term holders who accumulated between one week and three months peaked on August 19 when SOL was near $176. Since then, their share of supply has dropped from 27% to about 22%, showing active profit-taking.
Weak Inflows Undermine Support
Beyond profit-taking, weak money inflows are another concern. The Chaikin Money Flow (CMF), which measures buying versus selling pressure, has flipped negative.
On July 22, when Solana hit a local high, CMF stood at 0.31, indicating strong inflows. Today, despite higher prices, CMF has dropped to –0.01, suggesting whales and institutions aren’t adding fresh capital. Without that support, rallies risk fading quickly as sellers face little resistance.
SOL is currently struggling to break past the $218 resistance level. A decisive close above that point would signal a breakout and invalidate the bearish case. On the downside, strong support lies at $194, with further cushions at $186 and $173 if selling deepens.
Outlook: Relief Rally or Deeper Pullback?
For now, Solana’s price action looks fragile. Profit-taking is high, inflows are weakening, and resistance remains strong. Unless institutional demand returns, traders may need to brace for consolidation—or even a sharper pullback—before another leg up.
