- Solana’s price fell to $115 on Monday, marking a 24.5% decline over five consecutive days, reaching seven-month lows.
- The loss of crucial support levels at $125 and $120 over the weekend triggered significant liquidations on Monday.
- In the past week, bearish traders have utilized $730 million in leverage on SOL short positions.
The value of Solana plummeted to approximately $115 on Monday, reflecting a remarkable 24.5% drop over the last five days. Data from derivative markets suggest that bears may be aiming for even further declines in the upcoming sessions.
Traders of Solana (SOL) abandon positions following breaches of key support levels
On Monday, Solana’s price decreased to about $115, suffering an astonishing 24.5% loss in just five days. While broader macroeconomic issues, such as Trump’s trade tariffs and global inflation anxieties, have impacted the market, Solana has also encountered significant internal bearish factors.
The muted market reaction to Trump’s announcement regarding crypto strategic reserves on March 2, combined with the substantial token unlock from the FTX estate since March 1, has resulted in a marked increase in short-term market supply. Consequently, Solana has experienced sharper declines than competitors like XRP and ETH since the market correction began in mid-February.
Analysis of Solana’s Price | SOLUSD
With potential buyers reluctant to engage during the FTX unlock period, Solana has been particularly susceptible to major downward pressures.
This vulnerability became clear when the U.S. Non-Farm Payroll (NFP) data released on Friday sparked another wave of sell-offs.
As a result, Solana has been on a steady downward trajectory since March 5, culminating in a 24.5% decline over five days. As of this writing, SOL was trading near $115.
Short traders on SOL utilize $730M leverage, breaching two critical support thresholds within 24 hours
Solana’s lackluster performance in the spot markets coincides with the effects of the FTX unlocks, presenting a dual bearish catalyst alongside macroeconomic pressures driven by inflation.
Moreover, trends in the derivatives market illustrate that SOL’s sharp losses on Monday, surpassing those of ETH and XRP, are likely a result of aggressive short traders taking advantage of cautious investor sentiment.
Liquidation Map for Solana, March 10
Data tracking total leverage in active SOL perpetual futures contracts reveals a substantial short interest at critical price points.
In the last week alone, short traders have allocated more than $732 million in leverage, vastly outpacing the $93.6 million in existing long positions.
This imbalance indicates a marked shift in market sentiment, with long traders opting to close their positions en masse in light of the dual bearish catalysts.
The data also shows that SOL traders liquidated over $174 million in long contracts as the price dropped below the critical support levels of $125 and $120 over the weekend.
This wave of liquidations diminished buying support, contributing to a drop to a seven-month low near $115 on Monday.
Without a significant rebound in demand, SOL now appears set to decline further toward $99, where the next key support range lies.
Price Outlook for Solana: SOL Faces Risk of Deeper Decline as Bears Strengthen Below $120
Solana’s pricing is showing bearish tendencies, with technical indicators reinforcing downward pressure as SOL trades below crucial support levels.
The daily chart reveals SOL at $119.64, down 24.4% over four days, marking its most significant drop in months. Bollinger Bands are widening downward, trapping SOL’s price below the midline of $149.13, indicating ongoing weakness.
The lower band, now at $116.20, serves as immediate support; however, the sharp decline suggests further losses if buyers fail to regain lost territory.
Price Forecast for Solana | SOLUSD
Compounding the bearish trend, the RSI sits at 32.66, nearing oversold levels but without a definitive reversal signal. Notably, the RSI’s downward movement highlights ongoing selling pressure, particularly as it stays below the signal line at 35.91. This convergence of indicators corresponds with the broader sell-off induced by recent macroeconomic developments and Solana’s own supply-related challenges.
Bearish leverage remains a significant aspect, with $730 million in short positions applying additional downward pressure on SOL. Should selling pressure continue, SOL may fall below $116.20, risking a steeper descent toward $99. On the other hand, any recovery depends on bulls reclaiming the $125 threshold, which could invalidate the current downturn and open the door for a short squeeze aiming for $149.13.