Analyst: SOL supply on CEX drops to 27.01m, nears lowest point amidst price boom

The SOL token supply on centralized exchanges has dropped by 27.4% to 27.01 million, approaching the token’s lowest CEX supply in October 2022. Analyst believes the drop signals a bullish market is on the horizon.

According to on-chain analyst Murphy’s post on X, from early March until now, the amount of Solana (SOL) held on centralized exchanges have dropped drastically from 37.22 million to 27.01 million. The 27.4% decrease signifies the deepest drop to levels nearing the token’s lowest point, last seen in October 2022.

Referencing data from Glassnode, Murphy concluded that such a drop in Solana supply on exchanges like Binance, Coinbase, and Kraken, could indicate an increase in market demand for SOL. It suggests a growing desire among investors to hold more tokens rather than sell, which could result in either a potential price boost for Solana or a slow-down in the rally.

“This is bound to be a focal point for bullish and bearish battles; between $162 to $176, there is a significant chip accumulation zone, which can provide strong support during declines but may also create resistance during rises,” wrote Murphy in a recent post.

Murphy stated that the drop in exchange supply could be attributed to the surge in institutional demand, rise in staking activity as well as whale accumulation. All these events indicate strong foundational support for SOL.

Price chart for SOL in the past few days, May 28, 2025 | Source: crypto.news

At press time, Solana has dipped slightly by 0.5% in the past 24 hours. The token is currently trading hands at around $174. In the past month, SOL has seen fairly positive movements, rising by more than 15%. The token’s market cap stands at $90.7 billion, while its daily trading volume has seen a 23.3% increase, amounting to nearly $4 billion.

Murphy believes that if SOL manages to surpass the $176 threshold, it could clear much of the “trapped supply” and open the door for a potential price expansion.

Main reasons behind the SOL supply drop

Murphy mentioned four main drivers behind the CEX supply drop. First is the rise of institutional demand and ETF activity, especially after firms like Grayscale, Fidelity and Franklin have recently filed for Solana spot ETFs. Bloomberg estimated a 90% chance for approval by 2025.

Next is increased staking activity for Solana on exchanges. Murphy estimated that around 64% of the circulating SOL is currently staked. Protocols in the SOL ecosystem like Raydium, Jito, and Marinade have seen a surge in Total Value Locked, incentivizing more SOL to be moved on-chain for yield farming or staking.

In addition, SOL trading on DEXs have been through the roof thanks to a rise in meme coin activity. This marks a shift in SOL allocated to DEX trading rather than the ones sold on CEXs. At the moment, Solana-based meme coins account for more than 92% of DEX activity. Not only that, Solana’s TVL has gone up by 54%, and DEX volume surged by 90% since April 2025.

According to Murphy, whales have been accumulating more SOL from exchanges. According to data compiled from Whale Alert and Lookonchain, on April 21 as much as 374,000 SOL was transferred from Binance to an unknown wallet. Later on May 2, 2025, 145,000 SOL was moved from Kraken to three newly created wallet addresses.

On-chain data shows that Binance and Kraken have seen the largest drops in SOL balance.