- Solana’s price has fallen below the $125 support threshold on Thursday, declining by 4% over the past 24 hours.
- On Wednesday, wallets associated with FTX and Alameda Research unlocked $23 million worth of SOL, anticipating upcoming payments to creditors.
- Initial reactions in the derivatives market indicate that the momentum for Solana’s recovery may be faltering.
On Thursday, Solana is experiencing a 5% decline as bearish forces pushed the price beneath the crucial $125 support. The timing of this downturn aligns with the substantial unstaking of SOL in advance of creditor repayments for FTX, further amplifying bearish sentiment.
Solana (SOL) price falls below $125 support as bears take control
In the last 24 hours, Solana’s price performance has been lackluster. Despite a 0.26% rise in the overall cryptocurrency market capitalization on Thursday, both Solana and leading assets like Bitcoin (BTC) and Ethereum (ETH) registered slight losses.
Solana Price Analysis | March 12
The above chart shows that SOL initially surged by 17.3% on Wednesday, reclaiming levels above $131, before the sentiment shifted abruptly to bearish, leading to a significant pullback. This reversal was fueled by increasing worries regarding renewed selling pressure from FTX-associated wallets, creating a drag on price activity.
$23 Million Alameda Research transaction unsettles market dynamics
With BTC and ETH also underperforming, market trends suggest that traders are opting for high-risk, low-cap altcoins and memecoins, particularly in light of the recent U.S. Producer Price Index (PPI) data supporting the cooling inflation trend observed in Wednesday’s Consumer Price Index (CPI) data.
In Solana’s situation, however, a more immediate trigger seems to be in play. A blockchain analytics platform identified a significant transaction from Alameda Research just prior to SOL’s downturn.
Alameda Research transfers Solana (SOL) worth $23 million into 38 addresses, March 12
On-chain data indicates that Alameda unstaked over $23 million in SOL, a move likely connected to the impending creditor repayment timelines for the FTX estate.
“An FTX/Alameda staking address received $22.9M in SOL from a staking address unlock and has since distributed these funds to 37 addresses that had previously received SOL from this source. These addresses currently hold $178.82M in SOL.”
– Arkham Intelligence, March 12
Given the magnitude of these transactions, market participants are adopting a cautious approach, wary of more SOL supply hitting exchanges.
This internal bearish factor clarifies the 5% decline in SOL on the day while cryptocurrencies like XRP and BNB saw significant gains.
Why FTX liquidations could influence Solana’s price despite encouraging US CPI and PPI indicators
Historically, significant outflows from Alameda Research and wallets associated with FTX have been followed by episodes of price weakness for Solana.
Data from SpotOnChain reveals that this latest unstaking event follows an even larger one earlier in March, when FTX unlocked 3.03 million SOL—valued at about $432.5 million—and distributed the tokens across various wallets.
FTX’s Solana Unstaking History Since November 2023
Since November 2023, FTX and its trading division have unstaked approximately 8.019 million SOL, worth nearly $1 billion.
A considerable fraction of these holdings has already been liquidated via platforms like Coinbase and Binance in recent weeks, contributing to Solana’s comparative underperformance.
This effect was particularly pronounced in early March, when Solana managed only a 14% increase during a two-day rally, significantly lagging behind ADA and XRP, which surged 100% and 40%, respectively, following Donald Trump’s announcement regarding their inclusion in his proposed Crypto Strategic Reserve alongside BTC and ETH on March 2.
Solana price forecast
While macroeconomic conditions are improving, Solana’s potential for upward movement remains limited by the ongoing risk of further liquidations.
With around 5.5 million SOL—valued at approximately $693.8 million—still under the control of FTX and Alameda, new investors may hesitate to acquire SOL, apprehensive about potential sell pressure.
Until this overhang is resolved, Solana’s price may find it challenging to build significant momentum, even as general market sentiment becomes increasingly optimistic.
Solana technical analysis: Elliott Wave pattern indicates possible $112 reversal
Solana’s price is currently hovering near $123 as traders process the bearish momentum stemming from FTX-related liquidations.
The daily chart displays a corrective Elliott Wave pattern, highlighting ongoing downside risks despite broader market stability.
The ongoing ABC correction suggests that SOL might continue its descent toward significant Fibonacci retracement levels before any potential rebound.
Solana Technical Analysis (SOLUSD)
The Elliott Wave count suggests a completed wave (b) peak, followed by a prolonged wave (c) decline.
The wave structure is consistent with Fibonacci retracement levels, with the 0.398 Fib level at $112 serving as the initial major support area.
If selling pressure escalates, the subsequent bearish target could be at the 0.618 retracement level around $74.62, which may come into play if liquidation pressure continues.
Momentum indicators emphasize the bearish trend. The MACD line remains below the signal line, continuing its downward path into negative territory.
The histogram indicates deepening red bars, suggesting increasing downside momentum, and the moving averages reflect persistent weakness, indicating that bulls are struggling to regain lost ground.
Despite these bearish indicators, a bullish invalidation scenario could occur if SOL rises above the wave (b) high near $131.
A break above this threshold could alter momentum, drawing in buyers and negating the current bearish Elliott Wave structure.
However, with additional FTX payouts on the horizon, bears may remain active to take advantage of further downside risks.