Solana Liquidity Cleanse: Market Level Analysis and Recovery Outlook for Early 2026

As of December 10, 2025, the market structure of Solana (SOL) is undergoing what analysts at Altcoin Vector term a "complete liquidity reset." This process, characterized by realized losses outweighing realized gains, has been underway since mid-November 2025, according to Glassnode data. Historically, such cleansing events often precede the formation of a price floor and the initiation of a new liquidity cycle, providing a basis for a moderately optimistic medium-term forecast.

The immediate vulnerability stems from the elevated leverage present within the ecosystem, evidenced by recent liquidation events. Over the preceding 24 hours, Solana positions worth 15.6 million dollars were liquidated. This figure ranks third overall among crypto liquidations, which totaled 432 million dollars. Bitget analyst Ryan Lee suggests that flushing out this excess leverage could pave the way for renewed institutional inflows. Technically, immediate support is pegged at the 135 dollar mark. However, a drop toward 129 dollars risks triggering a cascading long liquidation event potentially amounting to 500 million dollars.

Two primary factors related to capital flows are providing structural support to the asset. Firstly, there is a consistent outflow of coins from centralized exchanges, which tightens the available supply for selling pressure. Secondly, the US-based spot Solana Exchange Traded Funds (ETFs) continue to see capital inflows. One recent week recorded a net inflow of 17.72 million dollars, closely following the 20.30 million dollars seen the week prior. Further institutional interest is underscored by the debut of the Franklin Templeton ETF on the NYSE on December 3, 2025, and Revolut’s announcement on the same date that it would offer full support for Solana.

Wenyi Cai, Chief Operating Officer at SynFutures, attributes the current liquidity squeeze to several converging factors: realized losses, a dip in futures open interest, the withdrawal of market makers, and fragmentation across liquidity pools. While the asset remains sensitive to short-term volatility, medium- and long-term outlooks retain a moderate positive bias, contingent upon easing macroeconomic headwinds. Drawing parallels with the situation in April 2025, analysts project that the price recovery could commence in early January 2026, aligning with a four-week lag following the onset of the reset phase.

A key near-term catalyst is the Solana Breakpoint 2025 conference, scheduled from December 11 to 13, 2025, at the Etihad Arena in Abu Dhabi. This year’s theme, focusing on "Revenue and Yield," signals a pivot toward demonstrable product value and measurable growth. Anticipated announcements concerning network scalability, Real-World Asset (RWA) tokenization, and artificial intelligence integration could provide a short-term boost for the SOL token. Current technical levels show consolidation, with resistance situated between 145 and 150 dollars. A decisive break above this range could open the path toward 155 and 170 dollars. Successfully navigating this liquidity cleansing phase is widely viewed as a prerequisite for establishing a robust foundation for the next growth trajectory.