The recent fall of Solana has captured the market’s attention, as its price has pulled back more sharply than other major crypto assets like Bitcoin and Ethereum. This decline, which has pushed SOL below key support levels, occurs amid massive liquidations and ecosystem-specific factors that are increasing selling pressure on the asset. Consequently, investors are watching cautiously as events unfold.
Data from Coinglass the derivatives market reveals one of the main reasons behind the current fall of Solana. Over the last 24 hours, Solana derivatives contracts worth $31.6 million were forced into selling, a significant figure within the $290 million liquidated across the entire market. This phenomenon is due to the fact that the asset has a higher exposure to leverage, which causes price corrections to be sharper when traders are forced to close their positions to cover losses.
Underlying Causes of Selling Pressure
In addition to high leverage, the fall of Solana has been driven by a “buy the rumor, sell the news” dynamic. Recent announcements about corporate treasuries, such as Forward Industries, purchasing SOL had already been priced in by the market. Therefore, once the news became official, speculators took the opportunity to take profits, thereby accelerating the price correction. This behavior is common in volatile markets where expectations often outpace a.
Another crucial factor adding considerable bearish pressure is the impending distribution of funds from the FTX estate. The FTX Recovery Trust is expected to distribute approximately $1.6 billion to creditors at the end of this month. This massive injection of capital into the market, which includes a significant portion of SOL, creates a sentiment of uncertainty and sell-off anticipation, directly contributing to the current fall of Solana by increasing the available supply.
In summary, the fall of Solana is not an isolated event but the result of a confluence of technical and fundamental factors. The combination of high leverage in the derivatives market, a “sell the news” reaction, and pressure from the upcoming FTX distribution creates a challenging short-term outlook. Looking ahead, SOL’s ability to absorb this selling pressure and maintain key support levels will be crucial in determining its trajectory in the coming weeks.
