Solana (SOL) is witnessing a sharp downturn, with its price dropping 7.35% on February 24 to $157.25, marking its lowest level since November 6. The decline puts SOL on the verge of erasing all post-Trump reelection gains, continuing a broader correction that began on January 19 when SOL hit its all-time high of $295.31—plummeting 47% since then.
Solana’s Association with Bybit Hackers Raises Concerns
SOL’s price is under pressure amid mounting concerns over its alleged ties to high-profile hacks and memecoin scams. The February 21 Bybit hack, which saw $1.4 billion stolen, has been linked to North Korea’s Lazarus Group. On-chain analyst ZachXBT discovered that wallets connected to the hack were also behind rug pulls on Solana’s Pump.fun platform. Further, these wallets were involved in January’s $29 million Phemex hack, revealing a pattern of fraudulent activity within Solana’s ecosystem.
Additionally, Solana has been plagued by memecoin scams, including the $107 million Libra token rug pull, eroding investor trust and capital inflows. The negative sentiment is driving down trading activity and SOL demand, exacerbating its price decline. Major Solana memecoins like Official Trump (TRUMP), Bonk (BONK), and Dogwifhat (WIF) have suffered heavy losses over the past week.
Token Unlock Sparks Fears of Sell-Off
Further compounding the bearish sentiment is Solana’s upcoming token unlock event on March 1. Approximately 11.16 million SOL (~$1.79 billion) will be released, primarily from the FTX estate. Investors fear a mass liquidation of these holdings could flood the market, increasing sell pressure. Uncertainty over the extent of the sell-off is fueling cautious trading and risk aversion, further weighing on SOL’s price.
Declining Open Interest and Negative Funding Rates Signal Weakness
Solana’s open interest (OI) in futures markets has dropped from $8.57 billion on January 17 to $5.11 billion as of February 24, indicating reduced speculative demand. Additionally, SOL’s funding rate turned negative, hitting -0.48% compared to 0.354% two days prior, signaling a bearish bias as short traders pay long traders to hold positions.
Solana’s technical outlook remains bleak, with the cryptocurrency breaking below its head-and-shoulders (H&S) pattern neckline at $177. This breakdown suggests a potential decline to $110—a 30% drop from current levels—unless SOL reclaims the neckline as support, which could fuel a recovery toward $215.
Also Read: Franklin Templeton Files for Solana ETF: Could Staking Influence SEC Approval?
As negative sentiment mounts, Solana remains at risk of further declines, with investors closely monitoring upcoming developments.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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