The Solana memecoin market, for a long time it was known for its explosive volatility and the sharp swings in sentiment that it provided; it’s memecoins after all.
Over the past 72 hours, Smart Money, which is the behavorial segment of the Solana memecoin market, has begun to change its direction. It used to trend towards accumulation. Now, the Smart Money behavorial segment, is in cautious distribution mode. May 22, 2023, marks the day that one of the most significant net outflows occurred. This hasn’t happened in over a week; at least, it hasn’t happened with any kind of significant look to it.
This abrupt change has captured the notice of every analyst and trader worth their salt. It has raised the specter of near-term price weakness and, even worse, the potential for a pronounced uptick in volatility.
From Accumulation to Distribution
The memecoin market on Solana was in a seemingly healthy position as recently as May 20. It had protection from buying signals coming from smart money flows, and it avoided the chaos of a market in leading conditions. Instead, it floated along, seemingly harmless, and with a nice atmosphere of cautious optimism, giving no signals to the market that it was in any kind of trouble. If this was your memecoin market, it would be doing fine—in the absence of any kind of memecoin bear market, which indeed there is now.
Smart money flows—typical buying signals for a healthy market—were present. This meant that buying was coming from experienced or high-volume traders. These sorts of traders generally know what they are doing.
But that outlook began to change on May 21. Selling picked up sharply, and several large holders started offloading their positions in top Solana-based memecoins. This change in behavior from large holders—from buying to selling—strongly suggests we are entering what analysts call a distribution phase.
Solana Memecoin Market Forecast – Today’s Outlook (May 22)
Over the past three days, memecoin market activity has shown a sharp shift in smart money behavior. On May 20, the market was balanced with a slight lean toward buying, indicating healthy participation and possible… pic.twitter.com/CvXGIe2lyU
— Stalkchain (@StalkHQ) May 22, 2025
Could it be that Solana-based memecoins are entering a bear market and will suffer a substantial price correction in the near future?
At first, the change was subtle, but it quickly gained momentum. Noticeably outpacing buying by day’s end was selling pressure, which suggested a shift in sentiment among high-conviction players.
May 22 Sees Sharp Spike in Sell Volume
At present, the trend is more intense than ever. The sell-side is enjoying a surge in volume, with net outflows hitting their highest level in over a week. Our on-chain monitoring tools indicate that the smart money wallets have been memecoin holders for far too long. Exit activity is at an all-time high, and it is indicative of a market that is becoming more and more cautionary. The risk-reward ratio is now decidedly unfavorable for short-term participants.
The disparity between buy and sell volumes has swelled so large that analysts are now cautioning of imminent near-term downside unless some really aggressive buyers step in to absorb all that pressure. If this trend doesn’t reverse itself soon, heightened volatility and further price correction could be the next order of the day.
This is particularly noteworthy because memecoins, by nature, are highly speculative assets. When the “smart money” begins to reduce exposure, it’s often a leading indicator that retail-driven euphoria is about to fade or reverse, leaving less experienced holders exposed to sudden drops.
Reversal Depends on Return of Confidence
For the market to stabilize—let alone, bounce back—a robust resurgence in institutional buying would be the necessary condition of satisfied possibility. This could happen as the result of a new catalyst, an improvement in overall market sentiment, or a reawakening of retail investors that draws them back into the memecoin space. Until then, the outlook remains oriented toward more risk and less return.
One possible scenario is an opportunistic buying at lower prices that could occur, should Solana’s price sharply correct in the future. The Solana memecoin market has not been historically immune to sharp downturns when oversold conditions have developed. However, it has been more of a victim than a beneficiary in these recent downturns. Thus, the possibility that Solana could already be near the bottom of its price level has developed as a counterpoint to the possible scenario in which the cryptocurrency price continues to fall sharply.
Conclusion: Near-Term Uncertainty Ahead
A pivotal shift has occurred over the last three days in the memecoin market on Solana. What had been a relatively stable and somewhat balanced Solana memecoin market has now shifted to one that is predominantly sell-side and where key players are taking a much more cautious approach.
- May 20: Market slightly favors buyers but remains balanced.
- May 21: Intelligent capital commences liquidation, signaling the onset of profit-taking.
- May 22: Net outflows surge to the highest levels of the week, underscoring a shift toward risk-off sentiment.
In the short term, buying activity that has not seen a resurgence means that the most likely route is downward. We should brace for more volatility and pay close attention to what the smart money is doing. And by “smart money,” I mean Solana’s best signals for potential trend shifts we can see in this part of their high-risk, high-reward ecosystem.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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