Solana’s downward spiral intensified on Monday, February 24, as SOL plummeted over 10% to hit $155 – levels last seen in mid-October last year.
The top altcoin has now down 14% in a single week and close to 40% in the last 30 days. With investors on edge, the question on everyone’s mind is: What’s driving Solana’s dramatic collapse?”
The two major crypto hacks that happened over the weekend spooked the market, leading to value loss for most coins.
First was the $1.4 Billion ByBit hack on Saturday, Feb. 22, which marked the largest-ever crypto hack in the history of the industry.
It was swiftly followed by a $49.5 Million hack of the stablecoin bank 0xInfini a day later.
These have seen the industry market cap drop by more than 3% or $93 Billion to settle around $3.1 Trillion.
It has also led to a shift in industry sentiment from Greed – last week to Neutral and borderline fear today.
Biggest Factor Dragging SOL Prices Today
The shift in market sentiment towards cryptos partly explains why SOL prices are down today. However, the market downturn isn’t the only thing impacting Solana prices.
The biggest markdown for the 6th largest altcoin’s prices may be attributed to the FUD associated with the unlocking of Solana Tokens by the FTX estate later this week.
This Saturday, March. 1, FTX will unlock 11.2 million SOL tokens – with a current valuation of more than $1.7 Billion.
Analysts and investors are concerned that the sell pressure associated with such an event will cause massive volatility and possibly push SOL prices further down.
These sentiments have the backing of key Solana data metrics. For example, Solana has a negative Open-Interest (OI) Weighted Funding Rate of -0.0017%, according to data from Coinglass.
This implies that the number of investors betting on the price of Solana to crash further is higher than those expecting it to go up.
Will Solana Rebound?
Eventually, Solana will rebound and possibly rally to a new all-time high before the end of this year.
Its short-term price action will, however, remain shaky as it grapples with a bearish market, the unraveling Libra Scandal, and now – the FTX unlock.
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