Solana has faced a significant sell-off recently, resulting in a precarious situation for the cryptocurrency. The price has plunged into a crucial demand zone, indicating a potential turning point. However, institutional investors are showing a notable level of caution, suggesting that they may prefer to wait for a clearer market direction before re-entering. The weekly chart for Solana reveals the extent of this downturn, with prices falling sharply from higher ranges to the current trading levels around $90 to $93. While some analysts are hopeful for a bounce back, the weak recovery thus far indicates that large buyers are not stepping in aggressively to support the price.

Institutional players have been particularly hesitant in this environment. Unlike retail investors, who may be tempted to buy the dip, institutional ETFs have shown little inclination to accumulate SOL at these lower price points. This marks a stark contrast to previous periods when they were actively purchasing at much higher levels. The behavior of these institutions prompts questions about whether they anticipated the crash. However, it appears that their strategies are less about predicting price bottoms and more focused on overall market trends, liquidity conditions, and capital flows.

ETFs typically do not employ dollar-cost averaging in the same way retail traders do. When market momentum is strong, they might buy at elevated prices to maintain their exposure. However, as volatility increases and trends reverse, the priority shifts to waiting for clarity rather than trying to catch a falling knife. For institutions, timing their entry with renewed market momentum is far more critical than simply buying at the lowest possible price.

Furthermore, the accumulation of ETF positions is closely tied to capital inflows. Without fresh investments pouring into these funds, there is little incentive for them to increase their holdings, even if prices appear discounted. This creates a challenging environment for short-term traders, as they shouldn't expect immediate institutional support. Currently, large players exhibit no urgency to jump back into the market.

The recent step-down decline in Solana has brought it into a key demand zone, a critical area for potential buying interest. Reports indicate that Solana has been in a series of price drops, reflecting ongoing bearish sentiment. The demand zone between $90 and $95 is significant as it has previously been a level where buyers have stepped in to defend the market.

While selling pressure seems to be easing in this range, it remains to be seen whether the market can form a solid short-term base. If this demand zone holds, analysts suggest that a technical rebound toward previous structural levels might occur. However, this would likely be viewed as a short-term relief move rather than a full reversal of the overall trend.

In summary, Solana's current predicament illustrates the delicate balance between price action and institutional sentiment. As the cryptocurrency navigates this challenging phase, the market watches closely to see if it can find footing in the key demand zone. Until then, the cautious approach from institutional investors underscores the uncertainty that continues to loom over the crypto landscape.