Solana investors are realizing more losses than profits through their transactions. New on-chain data shows liquidity has contracted. The shift for SOL mirrors conditions typically seen during bear markets.

What Happened: Loss-Taking Zone

Glassnode, an on-chain analytics firm, reported that Solana's Realized Profit/Loss Ratio has entered loss-taking territory, indicating realized losses now outweigh profits across the network.

The metric examines each coin's transaction history. It compares previous selling prices against current transaction prices to determine whether investors locked in gains or losses.

The 30-day moving average spiked sharply during September's rally. Profit-taking exploded. The indicator stayed elevated through October's peak, then dropped rapidly as prices fell in November.

The ratio breached below 1 last month, meaning loss realization began outpacing profit-taking. The decline has persisted. Investor capitulation now dominates the market.

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Why It Matters: Bear Market Conditions

Glassnode noted the trend indicates "liquidity has contracted back to levels typically seen in deep bear markets." The pattern carries weight.

Similar conditions persisted during the 2022 bear market, when Solana remained in this loss-taking zone for several months before finding a price bottom.

Whether low liquidity persists or proves temporary remains uncertain. Solana surged to $144 on Tuesday, but since then has pulled back to $138.

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