NewsBTC recently reported a significant shift in Solana’s (SOL) market dynamics. For the first time in three years, on-chain data indicates that Solana’s spot value has dipped below the Realized Price, following a recent bearish trend.
The Realized Price is a metric that represents the average cost basis of an investor or address on a given network, according to data from on-chain analytics firm Glassnode. When an asset’s spot price trades above this measure, it indicates that holders are netting unrealized profits. However, if the spot price drops below the Realized Price, it suggests that the average investor is incurring losses.
As depicted in the chart provided by Glassnode, SOL surpassed its Realized Price in 2023, yielding profits for investors. Although the price remained above this threshold throughout 2024 and the initial months of this year, a recent crossover has taken place.
Glassnode remarks, “For the first time in nearly three years, Solana has descended below its Realized Price.” Currently, the price is roughly 8% below this metric, which implies that the typical SOL holder could be experiencing an 8% loss.
As per the chart, the last time Solana witnessed such a crossover was in 2022, which marked the onset of a bear market. Consequently, the recent breakdown of the Realized Price could potentially signal a downturn for the cryptocurrency.
Historically, the Realized Price has functioned as a dividing line between bear and bull markets for various digital assets, including SOL. In another post, Glassnode shared Bitcoin’s version of this indicator, which is calculated based on the average cost basis of investors who bought their coins within the last 155 days. This variant of the indicator primarily serves to track short-term momentum shifts.
In light of the recent bearish market trends, Bitcoin’s short-term holders have also slipped into the red, hinting at potential further market drawdowns in the near future.
At the time of writing, Solana is trading at approximately $124, marking a nearly 9% decrease over the past week.
