Whale withdrawals led to Solana’s price dropping from $161 to $137, intensifying market volatility.
Solana’s price broke key support levels, reflecting increased bearish momentum.
Technical analysis suggests potential support at $130, with future stabilization possible if whale activity subsides.
Recently, the price of Solana (SOL) has dropped significantly as a result of large withdrawals from key investors. Lookonchain, an on-chain data tracker, revealed that a whale recently removed 139,532 SOL tokens. This action led to a significant decline in the cryptocurrency's market value and increased worries about its stability.
https://twitter.com/lookonchain/status/1829736219728847001 Impact of Whale Activity on Solana
Notably, Solana's price fell from recent highs of about $161 to current levels around $137 as a result of the massive withdrawal. Whales withdrew from the market, which resulted in a significant increase in market volatility. Bearish sentiment has been further intensified by historical data demonstrating a consistent pattern of similar whale activities being correlated with price declines.
In response to these withdrawals, the market has witnessed a surge in SOL tokens entering exchanges. This increase in supply therefore points to a possible sell-off by investors. The price of solana also had trouble holding support above vital technical levels. Notably, there was a resistance line that the price had previously broken through during bullish phases, providing significant support.
Technical Indicators Reflect Bearish Momentum
Consequently, technical analysis suggests that Solana is experiencing increased bearish momentum. On the daily chart, the Moving Average Convergence Divergence (MACD) indicates a bearish trend when the MACD line is below the signal line.
Notably, the growing gap between these lines is reflected in the histogram, which indicates growing selling pressure. This pattern indicates that traders' expectations for Solana's short-term price are getting progressively worse.
Furthermore, as the end of the quarter draws near, there is an increase in volatility in the larger cryptocurrency market. Price volatility is typically higher during this time, which might exacerbate the effect of significant whale withdrawals on Solana's price.
Potential for Future Stabilization
Additional research indicates that Solana may find support at $130, which corresponds to the 0.236 Fibonacci retracement level. After recent declines, this could be a critical turning point for price stabilization.
However, if whales keep unstaking, the staking ratio which is crucial for transaction validation and network security might drop. Reduced staking ratios may discourage new investors who are skeptical of Solana's long-term sustainability.
In spite of the current pessimistic outlook, there are still projects being launched and ongoing blockchain innovations that could eventually stabilize Solana's price. Some analyses indicate that there may be a longer-term recovery with a potential target price of $150 as liquid staking listings rise.
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