Solana Plunges to $130, Marking Its Lowest Point in Five Months and Creating Tension in the Market

Solana has plunged to $130, marking its lowest point in five months and creating tension in the market. The cryptocurrency has suffered a steep 33% decline

Solana (SOL) price fell to $130 on Wednesday, hitting its lowest point in five months amid a steep 33% decline over the past month. The cryptocurrency is now trading at a critical demand zone, with its price slipping by 8% over the past 24 hours.

At the time of writing, SOL is changing hands at $128.14, and its market cap has shrunk to $65.22 billion. This marks a significant reduction from its stronger standing at the beginning of 2025. Since the start of the year, Solana has seen a nearly 29% decline in its price.

Solana Price Today Surges 12% as TD Sequential Flashes Strong Buy Signal, But Is the Recovery Forming?

The recent drop below the $200 support level has triggered the current downward momentum, placing SOL on the verge of a steeper decline. Technical indicators are presenting mixed signals about the future direction of SOL’s price.

The TD Sequential indicator has flashed a strong buy signal on the daily chart, which could suggest a potential trend reversal. However, trading volume has collapsed by 61%, highlighting weak buying pressure.

This lack of market participation raises questions about whether a recovery is forming or if further price drops are ahead. The anticipated “buy-the-dip” response from traders is yet to materialize.

The daily candlestick charts are showing an accumulation of red candlesticks, which continues to exert selling pressure on the price. This selling pressure stems from profit-taking activity following Solana’s March rally to nearly $180.

Furthermore, the SOL/BTC pair has plunged to a two-year low, indicating that this cycle is witnessing its weakest performance yet.

Liquidations Hit Solana Traders

The recent price swings have resulted in significant liquidations for Solana traders. In the past 24 hours alone, a total of $26.55 million in trades were liquidated.

A majority of these were long positions with $23.45 million liquidated, suggesting that traders betting on a price rebound are being hit harder.

Solana’s Open Interest has edged up 1.63% to $3.95 billion. This increment comes amid weak accumulation patterns. Just last week, Open Interest clocked a peak of $5.31 billion as SOL retested the $180 level.

The next day saw it slide to $4.20 billion as sellers absorbed 20.45% of the previous day’s gains.

Memecoins Impact Solana Network

Liquidity flows present another challenge for SOL. Since January, over $9.5 billion worth of USDC stablecoins were minted on Solana.

However, only a small portion of these funds has flowed into the SOL token. A significant part of these inflows went into memecoins.

This capital flow pattern has prevented Solana from reaping the benefits of the recent cryptocurrency market boom. Investor trust in the network is also being affected by scams related to memecoins on the Solana chain.

The Libra token, which received an endorsement from Argentine President Javier Milei, was recently the target of a rug pull. Insiders withdrew $107 million from the Libra token.

Following this drainage, the token’s price crashed by 94% within hours. This scam is estimated to have wiped out approximately $4 billion in investor value.

Investors are shifting funds away from Solana as a result of these issues. In February alone, an estimated $485 million flowed out of the network. These funds are being moved into other chains like Ethereum, Arbitrum, and Binance Smart Chain.

The broader crypto market conditions aren’t helping Solana’s situation. The global cryptocurrency market cap now stands at $2.71 trillion, showing a 4.29% decline in 24 hours.

Bitcoin price today dropped by 5%, while Ethereum price is down by 6%, presenting an overall negative market sentiment.

The recent White House Crypto Summit on March 7 was expected to bring some optimism to the market. However, it appears to have had the opposite effect.

Since the event, we’ve seen a decline in prices across major cryptocurrencies.

Despite these challenges, historical precedent shows that the current price level has previously attracted dip buyers seeking discounted entries into the cryptocurrency. This factor could potentially provide some support for SOL’s price in the coming days.

Bitcoin’s consolidation phase often induces investors to rotate their holdings into altcoins, which might increase demand for Solana. However, this potential support hinges on broader market conditions showing improvement in the near term.

This will be crucial for paving the way for a recovery in the cryptocurrency market.