Solana (SOL) faced a sharp decline on May 25, plunging over 5% in a single hour during a surprise midnight sell-off. The intense price movement saw SOL drop below the key $172 support level, raising alarms about institutional investors exiting their positions amid broader market uncertainty.
Heavy Volume Sell-Off Raises Red Flags
At approximately 12:00 AM UTC, major crypto exchanges recorded a sudden spike in sell volume, with over $100 million in SOL traded within 45 minutes. Blockchain analytics firms, including SpotOnChain and Lookonchain, reported that several whale wallets and institutional-linked addresses offloaded large positions.
“This type of sell pressure — especially in a low-liquidity hour — often signals a coordinated exit, likely by institutional entities,” said a report from CryptoQuant.
Key Support Breached: $172 Level Broken
Solana had previously maintained strong technical support around $172, which had acted as a floor during multiple consolidation phases over the last two weeks. But the sell-off broke this level decisively, and SOL quickly dropped to a low of $164 before stabilizing slightly above $166.
“Losing $172 opens the door for a deeper retracement towards the $155–$160 range,” warned crypto trader @RektCapital on X.
Institutional Activity Declines
Data from CoinShares shows that institutional inflows into Solana-based products fell by 42% week-over-week, with many funds now reallocating to Bitcoin ETFs and Ethereum staking products.
On-chain data also indicates that large holders have been gradually reducing exposure over the past month.
This marks a potential shift in institutional sentiment toward SOL’s short-term outlook.
Market Reaction and Community Sentiment
The Solana community reacted swiftly to the sell-off, with many users voicing concerns over centralized ownership and whale dominance. Others remain optimistic, pointing to upcoming Solana DeFi launches and NFT integrations as long-term growth drivers.
Still, the fear and greed index for altcoins has dipped, indicating growing caution among retail investors.
“This could be a healthy correction or the start of a broader altcoin pullback,” said analyst Michaël van de Poppe.
Conclusion
Solana’s 5% plunge highlights the volatility driven by institutional moves.
While long-term fundamentals remain intact, breaking the $172 support level under high-volume pressure suggests near-term weakness. Investors are advised to watch the $160–$164 zone for stability and monitor whale activity closely.