- A cycle bottom-catching metric suggested that Solana was at or near its market bottom.
- The rising transaction activity in 2024 was a major boost to the network, despite the Q1 2025 setback.
Solana [SOL] showed signs of forming a long-term market bottom. The popular altcoin has tested the $115 level numerous times over the past 14 months.
The early April price drop to $100 was the lowest since February 2024. AMBCrypto found that Solana might be giving investors a good buying opportunity.
Source: Glassnode
The concept of dormancy was proposed in 2018 to understand the long-term economic health of Bitcoin, and it applies to Solana too. It is the average number of days destroyed per coin transacted on any given day.
The formula is coin days destroyed divided by the total volume of coins transacted on the blockchain.
The dormancy flow on the chart above is a slight adjustment, dividing the market cap by the 365DMA of the dormancy value. It is used to find long-term market bottoms and understand whether the cycle is in a bullish or bearish phase.
The 30-day Moving Average (MA) of the dormancy flow at press time was near the August 2023 levels. Back then, SOL was trading at $24.
The metric reached these levels in December 2020, when Solana was valued at $2 per token.
SOL investors are facing a loss, but activity was another reason to be bullish
The Spent Output Profit Ratio (SOPR) is the price sold/price paid. It is used to measure whether holders are selling at a loss or a profit. Values above 1 indicate profit, and below 1 signify losses.
The 30DMA of the SOPR was at 0.987 and has been below 1 since late February. The metric reflected the bearish market sentiment over the two months.
The falling dormancy flow and low SOPR suggest bearish market conditions. However, over the past year, the number of transactions, as seen through the 30-day MA, has been steadily rising.
Although a significant setback occurred between February and April, the trend has resumed its upward trajectory.
While it cannot be confirmed that Solana is forming a long-term price bottom, the likelihood increases as dormancy flow continues to decline. From a price action perspective, the $100-$120 range serves as a strong support zone.
Additionally, the revived transaction activity, especially when compared to 2022 and 2023, signals that investor confidence in Solana could yield substantial returns.
