Solana price faced a 4% decrease on Sunday, reaching as low as $167 due to various bearish factors such as the Bybit hack and upcoming SOL outflows from FTX Estate. Despite recovery attempts in the overall crypto market, Solana continued to experience losses, unlike other altcoins like Ethereum and Tron which managed to recover some of their losses from the Bybit crash on Friday.
The decline in Solana price was attributed to reports that hackers involved in the $1.4 billion Bybit hack were using Solana’s memecoin launchpad Pump.Fun to launder the stolen funds. Transactions linked to the stolen assets were identified by blockchain analytics platform WuBlockchain, raising concerns and sparking negative sentiment among investors. The controversy surrounding Solana’s involvement in illicit financial activities comes shortly after facing scrutiny over alleged ties to the LIBRA memecoin rug pull.
The ongoing repayment process for victims of the collapsed FTX exchange has also added to the bearish outlook for Solana, with concerns growing over further downside risk. With over $800 million already distributed to customer accounts and an additional 11.2 million SOL (approximately $2.03 billion) due for distribution on March 1, the potential impact on Solana’s price remains uncertain. While OTC sales could help alleviate immediate selling pressure, the recent decline in SOL price indicates caution among traders.
Solana’s price forecast suggests a potential breakdown below $150 if bearish risks materialize, with indicators showing ongoing selling pressure and bearish momentum. The current trading volume and lack of bullish signals indicate a dominant bearish trend, with a possible retest of psychological support at $150 if price continues to decline. A decisive bounce off current levels could push SOL towards $185 and potentially $211 if supported by increased buying volume, but without significant market participation, bearish risks remain prominent.
In conclusion, Solana is facing challenges from various bearish catalysts including the Bybit hack and FTX asset unlock, causing a decline in price and negative sentiment among investors. The involvement of Solana’s Pump.Fun in laundering stolen funds has further intensified concerns, potentially leading to strategic investors reducing their exposure to SOL. Traders are advised to watch key support levels at $160 and $150, as a break below could trigger further declines towards $135. Resistance levels are seen at $170 and $185, with a rebound above $170 signaling a potential recovery towards $185 and beyond. However, the lack of strong buying volume may keep bearish risks elevated in the near term.
