Solana is nearing a full retracement of its post-Trump reelection gains. On Feb. 24, SOL fell 7.35% to $157.25, its lowest since Nov. 6, marking a 47% drop from its $295.31 peak on Jan. 19.
Key reasons for the decline:
• Alleged ties between Solana and the Bybit hackers.
• An upcoming SOL token unlock.
• Negative funding rates in the futures market.
Solana’s alleged ties with Bybit hackers
Concerns over Solana’s links to high-profile hacks and memecoin scams are weighing on its price.
Key details:
• The $1.4 billion Bybit hack was linked to North Korea’s Lazarus Group.
• Investigator ZachXBT found that wallets tied to the Bybit hack were also involved in Solana-based memecoin scams and the $29 million Phemex hack.
• Solana has been plagued by scams, including the $107 million Libra rug pull, reducing trust and capital inflows.
• Top Solana memecoins, including TRUMP, BONK, and WIF, have suffered heavy losses, reducing transaction volumes and demand for SOL.
Solana faces “peak FUD” from token unlock
SOL is under pressure ahead of its March 1 token unlock, which will release 11.16M SOL (~$1.79 billion), primarily from the FTX estate.
Why it matters:
• Fears of sell pressure from FTX liquidations are causing risk aversion.
• Market uncertainty about how much SOL will be sold is leading to cautious trading.
• Investors are pricing in the potential impact, leading to preemptive selling.
Solana’s funding rates turn negative
Falling open interest (OI) and negative funding rates suggest weak speculative demand.
Key points:
• Solana’s OI has dropped from $8.57B on Jan. 17 to $5.11B on Feb. 24.
• A decline in OI signals traders are exiting positions, reducing price momentum.
• SOL’s weekly funding rate fell to -0.48% on Feb. 24 from 0.354% two days earlier.
• Negative funding means short sellers are paying long positions, indicating bearish sentiment.
Solana eyes another 30% drop
SOL is breaking down from a head-and-shoulders (H&S) pattern, suggesting more downside risk.
What to watch:
• The neckline at $177 has been breached, confirming a bearish outlook.
• The H&S target price is ~$110, implying a 30% drop from current levels.
• A reclaim of $177 as support could invalidate the bearish scenario and push SOL back toward $215.