- Solana (SOL) has dropped below $160, triggering over $26 million in liquidations within 24 hours, with technical indicators and market sentiment pointing to a potential further decline toward $120.
- Additional bearish pressure comes from the LIBRA memecoin controversy and FTX’s upcoming $2.06 billion token release, which could increase selling pressure.
Solana (SOL) has extended its decline, dropping below the $160 mark on Monday after an 11% slump last week. This correction has resulted in over $26 million in liquidations in the past 24 hours and a staggering $110 million over the past week. The ongoing bearish momentum, coupled with a negative funding rate, suggests further downside potential, possibly targeting the $120 level.
Liquidation Wave Sparks Investor Concerns
SOL’s latest price dip has triggered mass liquidations, as traders betting on price stability or growth have been caught off guard. According to CoinGlass data, the last 24 hours alone saw $26.25 million in liquidations, exacerbating fear, uncertainty, and doubt (FUD) among investors. The increased selling pressure may lead to further price declines.
Moreover, the OI-Weighted Funding Rate data from CoinGlass reveals a growing bearish sentiment. The funding rate currently stands at -0.0023%, meaning that short sellers (those betting on further price drops) are paying long traders. This negative funding rate suggests the market expects additional downward movement.
Technical Indicators Signal Further Decline
Several technical indicators reinforce the bearish outlook for Solana:
- Relative Strength Index (RSI): Currently at 31, the RSI indicates strong bearish momentum while still not reaching oversold levels, suggesting further downside room.
- Moving Average Convergence Divergence (MACD): The MACD indicator displays red histograms below the neutral level, signaling continued bearish trends.
- Support Levels: If SOL continues its decline, the next key support level is around $120.91, where a potential bounce could occur.
Other Bearish Catalysts Impacting Solana
Beyond technical analysis, external factors are adding to the bearish pressure on SOL. The recent controversy surrounding the Solana-based LIBRA memecoin has contributed to uncertainty. Alleged connections to the MELANIA token and Argentina’s President Javier Milei have sparked concerns, leading to significant losses in the chain’s market capitalization.
Additionally, FTX’s upcoming token release has created further speculation around Solana. The bankrupt crypto exchange plans to unlock 11.2 million SOL tokens worth approximately $2.06 billion on March 1. This significant token redistribution could result in increased supply, potentially driving the price lower.
What’s Next for Solana?
With strong bearish sentiment dominating, Solana traders should brace for potential further declines. If SOL fails to find support above $160, the next major level to watch is $120. However, any bullish reversal could depend on shifts in market sentiment, reduced selling pressure, or new positive developments in the Solana ecosystem.
For now, caution remains key as investors navigate the ongoing volatility in SOL’s price action.