Why is Solana’s Price Plummeting?

What Transactions Are Causing This Sell-Off?

Recent findings by Arkham Intelligence shed light on the root cause of the sharp price drop. On March 13, Alameda Research unstaked around $23 million worth of SOL tokens, leading to a 5% price drop shortly thereafter. This move is part of a broader strategy by Alameda, which appears to be actively liquidating assets to settle loan obligations. Since November 2023, Alameda has sold nearly 8 million SOL tokens, contributing to the growing downward pressure on Solana’s price.

The sales from FTX and Alameda, primarily occurring on major cryptocurrency exchanges, have created substantial selling pressure in the market. As a result, Solana’s value has continued to decline, and the impact on market sentiment has been significant.

Are There More Risks Ahead for Investors?

Despite the recent sell-offs, FTX and its affiliates still hold around $693 million in 5.5 million SOL tokens. This raises concerns that further asset liquidations could occur in the near future, potentially driving Solana’s value even lower. Investors and traders are advised to remain cautious, as the continued sales of SOL tokens by FTX and Alameda may lead to additional market instability.

Technical Analysis and Market Outlook

From a technical perspective, Solana has entered a concerning downward trajectory after reaching a recent peak of $131. According to the Elliott Wave model, analysts predict that the next support threshold for SOL could be around $112. This indicates that Solana may experience further price declines if market conditions do not improve.

Technical indicators suggest a precarious situation for SOL, and many market participants believe it is unlikely for Solana to reverse its downward trend in the immediate future. The combination of persistent sell-offs and bearish technical patterns points to continued risk for investors.

Key Takeaways for Investors

• Major sell-offs by FTX and Alameda are ongoing, which could put further downward pressure on SOL’s price.
• Technical indicators are showing a precarious situation, with a potential support level around $112.
• Investors should prepare for potential further declines in Solana’s price.
• Given the ongoing market dynamics, traders are advised to proceed with caution and monitor changes in SOL’s price movements closely.

In conclusion, while Solana has been a strong player in the crypto market, the ongoing sell-offs by FTX and Alameda Research, combined with bearish technical indicators, suggest that further risks lie ahead for SOL. Investors should stay vigilant and consider the potential for additional price declines in the near term.