Solana is facing one of its toughest weeks of the year. More than 80% of the circulating supply is now sitting in unrealized losses, after the token broke key support levels and triggered alarm among traders and institutions. On top of that, around $239 million in long positions are close to liquidation, raising fears of a deeper sell-off.

Mounting Technical Stress and Market Fragility

The market backdrop isn’t helping. A death cross has formed — when the 50-day moving average drops below the 200-day — a signal traditionally tied to extended bearish phases and shaken sentiment among holders.

At the same time, the broader crypto market has also been hit hard. Over $1 billion in liquidations were recorded recently, and close to $1 trillion in market value has evaporated, draining liquidity and increasing the risk of additional liquidation cascades. With long exposure elevated and capital rotating more slowly, slippage risk is rising sharply, especially for treasuries and liquidity providers in concentrated pools.

At $126.9, about 79.6% of Solana’s circulating supply (r~478.5M SOL) is now in loss, underscoring how top-heavy the market structure had become before the recent contraction.

📉 https://t.co/jEmGiESmpL pic.twitter.com/P1M0H5cjtG

— glassnode (@glassnode) November 23, 2025

Solana’s history of network interruptions continues to weigh on confidence as well. Six major outages and fifteen partial incidents since January 2022 — including a nearly five-hour halt in February 2024 — still influence user risk perception, especially for those running derivatives strategies or high-frequency market-making operations.

Yet not everything tilts negative. Despite the price pressure, institutional inflows into Solana-linked products have reached $719 million since launch, signaling strategic accumulation from long-horizon investors rather than panic exits.

On-chain activity also continues at strong levels. TVL is up 32.7% to $11.5 billion, stablecoin circulation has reached $14.1 billion, and active developers remain between 61,000 and 63,000. These metrics suggest that while the token suffers a deep correction, ecosystem usage and development remain robust.

For treasuries and institutional allocators, this creates a nuanced situation: price risk is high, but ecosystem depth remains solid. Tools like delta-neutral strategies or derivative-based hedging may help cushion potential liquidation events.

Solana’s sell-off is testing the network’s resilience on both market and operational fronts. The clash between technical weakness and sustained institutional inflows leaves traders navigating a mixed, high-stakes landscape.