- Solana (SOL) has dropped below the critical $100 support level, falling over 17% in 24 hours due to a broader market downturn and a $200 million token unlock.
- Despite the price decline, Solana’s DeFi ecosystem remains strong, though technical indicators suggest further downside risk for the cryptocurrency.
Solana (SOL) has been hit hard in the cryptocurrency market, with its price plunging below the critical $100 support level to around $97.85. The cryptocurrency has seen a steep decline of over 17% in the last 24 hours, contributing to the broader selloff that has wiped out $1.3 trillion in market capitalization since January. As Solana faces technical challenges and significant external factors, investors are questioning whether further downside is on the horizon.
Market-Wide Pressure Amplifies Solana’s Struggles
The recent drop in Solana’s price is part of a broader cryptocurrency market downturn, often referred to as the “ugly Monday crash.” While other major cryptocurrencies, including Ethereum and XRP, have faced even steeper losses, Solana’s woes have been intensified by broader market uncertainty. This selloff is believed to be linked to global economic concerns, especially after President Donald Trump’s declaration of worldwide tariffs, which has created fears of a crisis scenario.
$200M Token Unlock Puts Extra Pressure on SOL
A major contributing factor to Solana’s decline is the recent unlocking of 1.79 million SOL tokens on April 4, worth over $200 million. These tokens were initially staked in April 2021 when SOL was valued at about $23. The profit-taking opportunity is substantial for the original stakers, and as a result, the market is experiencing added selling pressure. On-chain platform Arkham reports that four accounts, which originally staked these tokens, are responsible for this massive unlock. This event is the largest planned SOL unlock until 2028 and is especially impactful given the already volatile market conditions.
Solana’s Resilient DeFi Ecosystem Amidst Price Struggles
Despite the price downturn, Solana’s decentralized finance (DeFi) ecosystem has shown surprising resilience. The Total Value Locked (TVL) in SOL reached 53.8 million SOL on April 2, a 14% increase from the previous month. Solana also holds a strong position in the DeFi space, with a TVL of $6.5 billion, well ahead of BNB Chain’s $5.7 billion. Additionally, Solana maintains a 24% market share in decentralized exchange (DEX) volumes, far surpassing BNB Chain’s 12%. Key DeFi platforms such as Jito, Jupiter, and Kamino continue to thrive on the Solana network.
Memecoin Decline and MEV Concerns Contribute to Reduced Activity
The cooling of the memecoin market has also had an impact on Solana’s price. Memecoins were a key driver of new user adoption on the network, but several Solana-based memecoins have seen their prices fall by 20% or more in the past week. Moreover, concerns about Maximum Extractable Value (MEV), where validators reorder transactions for profit, have raised questions about the network’s future dynamics.
Technical Indicators Suggest Further Weakness
From a technical standpoint, Solana’s outlook remains grim. Key indicators point to a continued bearish trend. The Moving Average Convergence Divergence (MACD) is accelerating in bearish territory, and the Relative Strength Index (RSI) is below the neutral 50 level, signaling ongoing selling pressure. Solana’s price is also well below both the $105 level and the 100-hour simple moving average.
At the current price of $97.85, Solana is testing the $92 support level. A failure to hold this level could indicate further weakness, with the possibility of a deeper pullback. On the other hand, a recovery above $105 would signal a potential reversal, but the road to higher resistance levels at $112 and $116 would require strong bullish momentum.
While Solana’s DeFi fundamentals remain solid, its short-term price action faces substantial headwinds that could push the price lower in the coming days.
