Solana exchange balances have fallen to their lowest level since October 2022

Solana exchange balances have fallen to their lowest level since October 2022 and currently store just 27.01 million SOL on centralized exchanges.

The 27.4% decline from 37.22 million SOL in early March comes after a series of institutional and retail occasions pushing tokens off exchanges and into self-custody programs.

Solana exchange outflows driven by institutional and ETF demand

The decline in Solana exchange balances is due to numerous institutional innovations that have created demand for off-exchange custody. On March 20, the first batch of Solana futures ETFs was introduced. This was the beginning of institutional product exposures in SOL.

Once the futures ETF launches, the biggest financial houses like Grayscale, Fidelity, and Franklin submitted applications for spot SOL ETFs. Bloomberg raised the chances of spot ETF application approval to 90% by 2025 and generated institutional investor anticipation.

This regulatory progress has prompted institutions to move their SOL holdings to compliant custodians or cold wallet storage rather than keeping tokens on exchanges, according to analyst Murphy. The institutional preference for secure custody solutions has contributed to the overall reduction in exchange balances as professional investors prepare for potential ETF launches.

Staking activity has also increased substantially, with approximately 64% of total circulating SOL currently staked across various protocols. The total value locked in protocols such as Raydium, Jito, and Marinade has surged. This attracted more SOL to be moved on-chain to participate in staking rewards.

Additionally, specific whale movements have been tracked, including 374,000 SOL transferred from Binance to an unknown wallet on April 21, 2025, and 145,000 SOL moved from Kraken to three newly created addresses on May 2, 2025.

DeFi and meme coin activity drives on-chain SOL demand

The Solana network has experienced substantial growth in decentralized finance activity and meme coin trading. This has created additional demand for SOL to be moved off exchanges. Since April, the network’s total value locked has increased by 54%.

Decentralized exchange trading volume on Solana jumped 90% in 30 days. Based on the data, meme coin trades accounted for more than 92% of total Solana DEX trading volume. Such activity requires the holder of SOL in self-custodied wallets to participate in on-chain trading, coin minting, airdrops, and other meme token usage.

Meme coin popularity on the Solana blockchain has created a loop where SOL is taken out from centralized exchanges to participate in such on-chain activities. High transaction frequency and constant trade of meme tokens necessitate SOL to be readily available in individual wallets for trading and gas fee purposes.

This on-chain activity trend differs from more traditional exchange-based trading because users have to have direct access to the blockchain in order to partake in the ecosystem of meme coins. Combined with DeFi growth and meme coin popularity, this has driven steady demand for SOL to be held in self-custody rather than on exchanges.

Critical price resistance level at $176 could determine SOL’s trajectory

Solana is at about $175 at the moment and according to URPD (Unrealized Profit/Loss Distribution) figures, SOL has reached the strongest resistance level of $176. It contains the highest agglomeration of accreted tokens.

The current market movement places SOL 40.6% below its all-time high price of $293.31 recorded on January 19, 2025. The 24-hour range for the token is $174.20 to $178.90, and the 7-day range is $167.42 to $186.79.

Analysis indicates that once SOL crosses above $176, there would not be much locked-in positions above this level. However, the $162-$176 range contains huge built-up positions that become both support in downtrends and resistance in going higher.

The mix of this reduced exchange offsetting this technical setup signifies that although short-term direction in price is ambiguous, structural change in SOL dissemination potentially might be capable of providing longer-term support for higher prices if resistance level is surpassed.

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