Solana Cost Basis Distribution Reveals Where Supply Is Most Concentrated

In a new post on X, Glassnode has discussed about the UTXO Realized Price Distribution (URPD) of Solana. The URPD is an indicator that basically tells us about how much of the SOL supply was purchased at which price levels.

Analytics firm Glassnode has revealed the Solana (SOL) price levels that could be important to watch, based on on-chain accumulation data. In a new post on X, the firm is discussing the UTXO Realized Price Distribution (URPD) of the world's ninth-largest cryptocurrency.

The URPD is an indicator that tells us how much of the SOL supply was purchased at which price levels. Naturally, the metric uses the last transaction price of any token in circulation as its cost basis.

First, here is how the URPD looked when Solana set its new all-time high (ATH) back in January:

Image Credit: Glassnode

At the price levels closer to the new ATH, supply was quite thin, meaning not many coins changed hands there. In on-chain analysis, the potential of any level to act as support or resistance is measured in terms of the amount of supply that it hosts.

This means that levels that have a large cluster around them on the URPD are the ones of importance to the asset.

As for why this is so, the answer lies in investor psychology: holders are sensitive to retests of their cost basis. Whenever the price touches a large cost basis cluster, the investors who are holding these coins may respond by making some panic moves.

These moves can tend toward buying if the retest is happening from above, as investors may want to defend their profit-loss boundary.

In retests happening from below, however, the traders could react by selling instead, as they may seek to exit at their break-even.

When Solana reached its ATH, there was a lack of support nearby. This may be why the asset ended up falling into the cluster that did carry a significant amount of supply.

Here is how the URPD has changed following the price drawdown:

Image Credit: Glassnode

If Solana continues its downtrend, it may have to end up relying on the freshly grown $112 level. In January, this level hosted the cost basis of 4 million tokens, but today, the figure has grown to 9.7 million, equal to 1.67% of the entire supply.

Beyond this level, Glassnode notes, “$94, $97, and $100 collectively hold nearly 21M SOL (3.5% of supply). In the scenario that these support levels fail, Solana may find itself in deep trouble, as there aren't any major supply clusters until $53.”

In terms of the levels above, the $135 and $144 levels stand out, as they hold the acquisition level of 26.6 million and 27 million coins, respectively. These levels could act as major obstacles in Solana's recovery.