The growing bearish market performance appears to have heavily impacted Solana’s price action, causing the altcoin to resist key support levels after a period of bullish movements. Given the prevailing waning price performance, indications of profit-taking are starting to emerge as SOL witnesses a major surge in Coin Days Destroyed.
Coins Days Destroyed Explodes On Solana
Solana’s current bearish trend has triggered a notable shift in its on-chain dynamics. Following this weakening period is the recent massive spike in Coin Days Destroyed as reported by Glassnode, a leading financial and on-chain data platform, in a post on X.
The Coin Days Destroyed (CDD) is a key metric that measures the movement of coins by weighting transactions based on how long these assets have been held. Thus, such a huge uptick in the metric signals a significant movement of long-held coins.
Furthermore, the development points to a possible profit-taking from long-dormant wallets or a strategic realignment by seasoned investors. Should this trend persist, it is likely to have implications for Solana’s price trajectory.
According to the on-chain platform, the coin days destroyed for Solana year-to-date (YTD) reached approximately 3.55 billion SOL on Tuesday, marking its third-largest spike since the beginning of this year.
In prior spikes, the coin days destroyed increased sharply to 5.53 billion SOL on February 26, which currently stands as the biggest so far this year. Meanwhile, the second-largest surge in coin days destroyed was recorded on March 3, reaching about 4.64 billion SOL. Glassnode noted that these consistently large spikes are hinting at a shift in holders’ conviction as the SOL price struggles to regain upward momentum.
With previous massive spikes preceding heightened volatility, SOL’s waning price may be extended in the upcoming weeks. A continuation of the ongoing volatile period is likely to trigger distribution among these wallets, driven by reduced volume and technical flashes of mean oversold setups.
SOL’s Network Fundamentals Showing Strength
Despite the substantial upticks in the coin days destroyed, the Solana network activity remains strong. The Solana Post, an informative platform on X, disclosed that the network is flexing its strength, consistently surpassing all other chains in the number of active addresses and transactions processed in a single day.
Data from the platform shows that the daily active wallet addresses on the network have increased to 7 million, while the daily transaction count exceeds 100 million. This notable performance could be attributed to the network’s low transaction costs and fast throughput, which keep attracting users and developers. SOL’s heightened user engagement, surpassing that of all other major chains, highlights its growing dominance in blockchain activity, cementing its position as a leading network.
Featured image from Adobe Stock, chart from Tradingview.com
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