Solana exhibits an on-chain pattern that appears bearish at first glance, but becomes constructive when considered in conjunction with capital flows into regulated investment products.
Over the past month, early Solana holders, investors who accumulated during the market’s quiet phase, have begun putting their old coins back into circulation.
Arkham Intelligence Analyst Emmett Gallic provides more details. reported On October 30th, it was announced that the long-dormant Solana address had recently transferred 200,000 SOL, worth approximately $40 million, to Coinbase Prime. Typically, such transactions often raise concerns that the major holder is preparing to sell.
In fact, CryptoQuant data reinforces that perception, showing that large wallets have recently dominated the average size of spot trades on major exchanges. This suggests that older, better-capitalized investors were diversifying their holdings into stronger positions.
That action is not inherently bearish. Whether it’s Bitcoin, Ethereum, or Solana, seasoned investors tend to sell when market liquidity increases rather than when market liquidity is low.
But what sets the current cycle apart is that a new class of buyers is absorbing that supply.
ETF flows absorb supply
According to CoinShares’ Digital Asset Fund Weekly Report, Solana-specific products received approximately $381 million in inflows during the month, bringing year-to-date inflows to approximately $2.8 billion.
This puts Solana on top, behind Bitcoin and Ethereum, as one of the best-performing cryptoassets among institutional products, despite a significant market decline that wiped out more than $20 billion from investors earlier this month.
Additionally, this change coincided with the debut of several new US-listed Solana investment vehicles.
In fact, Grayscale’s Solana Trust (ticker: GSOL), which converted to an exchange-traded format on October 29, posted modest first-day net inflows of $1.4 million, according to SoSoValue data.
A day earlier, Bitwise’s Solana Staking ETF (BSOL) had a much stronger debut with $69.5 million in inflows, followed by another $46.5 million in inflows on October 29th. In fact, trading activity reflected the frenzy, with BSOL posting volume of $57.9 million on the first day and more than $72 million the following day.
With this in mind, Bloomberg ETF analyst Eric Balchunas described the performance as a “strong sign of institutional demand” for Solana-related products.
How does this affect SOL?
Changes in ownership relationships are strengthening rather than weakening Solana’s market structure.
While older wallets have been circulating coins, sales are being absorbed by regulated ETFs and institutional investors with longer investment horizons. This reduces short-term speculative fluctuations and ensures more stable programmatic demand.
On the price side, this handoff helps explain why SOL has remained within the $180 to $200 range even as broader volatility in the cryptocurrency has increased.
The token has shown controlled consolidation rather than a sharp decline, suggesting that newly created ETF shares are being absorbed faster than they can re-enter exchanges. Inflows from Bitwise’s BSOL and Grayscale’s GSOL act as a continuous liquidity sink, effectively tightening the float available in the spot market.
At the same time, Solana’s derivatives market deepened further as open interest increased from less than $8 billion to nearly $10 billion.
This additional liquidity gives large holders room to de-risk their positions without triggering abnormal price reactions. Together, these two trends create a cushion against volatility. Liquidity is expanding even as ownership is concentrated in long-term vehicles.
If this pattern holds, it will support a more mature stage of price discovery.
SOL may continue to trade sideways in the short term, but there will be less downside pressure and more support for future upside.
But the key risk is that while long-term holders continue to make distributions, the ETF’s inflows drop below about $100 million each week. This imbalance could flip the equation, pushing SOL back in the direction of exchange supply and weakening price stability.