Solana (SOL) Price on the Brink: Will It Plunge Below Critical $160 Support?
According to recent market data, Solana (SOL) continues to face strong selling pressure, pushing its price lower. Since its peak price above $250, Solana has experienced substantial price devaluation to its current value. The market exhibits high volatility, suggesting prices will likely keep dropping in the near future.
The forthcoming release of 11.2 million SOL through FTX’s bankruptcy will intensify market selling activity. In March, the supply volume of $1.6 billion SOL will become accessible, raising questions about the token’s stability. Market pricing may decline further during the upcoming weeks because demand fails to match this additional supply.
Market investors display persistent doubt because of independent crypto frauds like $LIBRA, $TRUMP and $MELANIA which were exposed as scams. Recent incidents have caused investors to maintain caution during their trading activities. The market demonstrates its unsettled emotions through lower buying and selling frequency and growing precautionary measures from traders.
Solana Price Faces Key Support Level Test
Solana is currently trading at around $171, reflecting a modest gain of 1.61% in the past 24 hours. However, the cryptocurrency remains downward, indicating that sellers maintain control. Further declines could follow if the price fails to hold key support levels.
The recent price action indicates that SOL is testing the lower Fibonacci retracement zones. A successful hold at $160 support could push the price toward the $180–$185 range. However, a break below this level could accelerate losses toward $150–$155, potentially dropping to the $125–$130 range if selling pressure persists.
The Relative Strength Index (RSI) is near oversold levels, currently at 32.80. If buying pressure increases, a rebound could occur, but market conditions remain uncertain. The indicator suggests SOL might experience a short-term bounce before any upward move.
The MACD remains in bearish territory, with the histogram showing negative values. The MACD and signal lines continue trending downward, indicating sellers are still in control. A bullish crossover would be necessary to confirm a reversal, but no such signal has appeared yet.
The Aroon indicator also highlights a strong downtrend, with the Aroon Down at 85.71%. Meanwhile, the Aroon Up is at 28.57%, showing that downward momentum remains dominant. Until this trend weakens, Solana’s price could remain under pressure.
Solana Funding Rate Signals Market Uncertainty
The volume-weighted funding rate for Solana has fluctuated between positive and negative territory in recent months. The December funding rates indicated optimism, which seems to have given way to increasing uncertainty throughout recent time periods. The current funding rate shows almost no movement, neither in a positive nor a negative direction, indicating traders remain unsure about future market movements.
The continuous appearance of negative funding rates indicates that short positions dominate SOL, generating more downward pressure on its price. The funding rates plummeted in mid-January, followed by early February, just as SOL prices decreased, highlighting a substantial bearish influence. When funding rates stay stable in positive numbers, it suggests traders are growing more optimistic about SOL.
The decrease in trading activity has reached 40% during the last 24 hours, indicating dual market participation. Market price could experience additional depreciation when trading volume remains low, along with negative funding rates. Positive funding coupled with rising trading volume has the potential to trigger an opposing market trend.
Short Liquidations Rise as Price Moves Up
Solana has experienced significant liquidation activity, with both long and short positions affected by market fluctuations. Coinglass data indicates that long positions such as SOL have faced higher levels of liquidation throughout price correction periods. Price movements in SOL’s market are causing numerous traders to be surprised by SOL’s price sharpness.
The price made targeted increases, which led to a large number of short positions being liquidated. The traders speculating a price decrease must close their positions ahead of schedule, possibly because current market conditions are not in their favor. Major liquidations cause market volatility to rise because they create unpredictable price fluctuations.
When market trading volume increases while the number of traders exiting their long positions falls, this indicates new potential market interest. The probability of an opposing trend might form when buying pressure approaches vital support points. Persistent market liquidations will probably drive reduced asset values, which would amplify present price drops.
Conclusion
Solana remains under pressure as technical indicators point to a continued bearish trend. With key support levels being tested, traders watch for potential reversal signs. If SOL breaks below $160, a drop to the $150–$155 range becomes likely.
The upcoming token unlocks and ongoing liquidation activity adds further uncertainty to the market. Investors should monitor funding rates, RSI levels, and MACD signals for potential trend shifts. SOL needs to reclaim resistance levels above $200 for a sustained recovery and to regain market confidence.
FAQs
What is causing Solana’s price decline?
Solana’s price decline is driven by technical weakness, upcoming token unlocks, and bearish sentiment in the broader crypto market.
What key levels should traders watch?
Traders should monitor the $160 support level and the $180–$185 resistance range. A break below $160 could lead to further losses.
How do liquidation events impact Solana’s price?
Liquidation events create volatility as forced selling or buying can accelerate price movements. High liquidation levels can trigger rapid price swings.
Is Solana oversold?
The RSI indicates that Solana is near the oversold territory, suggesting a possible short-term bounce if buying pressure increases.
What needs to happen for Solana to recover?
Solana must reclaim resistance above $200, and show increased trading volume to confirm a bullish reversal.
Glossary
Support Level: A price level where buying interest is strong enough to prevent further declines.
Resistance Level: A price level where selling interest is strong enough to prevent further gains.
MACD (Moving Average Convergence Divergence): A trend-following indicator that shows momentum shifts.
RSI (Relative Strength Index): A momentum indicator that identifies overbought or oversold conditions.
Funding Rate: The cost of holding leveraged positions in perpetual futures markets.
Liquidation: The forced closure of a trading position due to insufficient margin.
Reference
CoinMarketCap
Coinglass
TradingView
HBAR Foundation invests in tokenized Fidelity USD Money Market Fund
The HBAR Foundation has announced an investment in Archax’s tokenized shares of Fidelity International’s USD Money Market Fund.
Archax, the first FCA-regulated digital asset exchange, broker, and custodian, recently tokenized the MMF on the Hedera ( HBAR ) network.
The tokenized shares, available on the Archax platform, allow institutional investors to gain exposure to the fund through blockchain technology. These digital assets can also serve as proof-of-reserves for stablecoin treasury verification, enhancing transparency within the broader digital finance ecosystem, according to a company announcement.
The move highlights Hedera’s expanding role in institutional tokenization while advancing Fidelity International’s efforts to bring traditional financial products on-chain.
Last December, Hedera integrated Chainlink’s Data Feeds and Proof of Reserve on its mainnet to support DeFi and tokenized real-world assets. This followed a partnership between the HBAR Foundation and Chainlink ( LINK ), giving developers access to high-quality data and on-chain reserve verification.
Gregg Bell, Senior Vice President at the HBAR Foundation, emphasized the strategic importance of the investment, stating, “Looking ahead to 2025, real-world asset tokenization will be a key catalyst for blockchain adoption. Our vision for a fully tokenized financial ecosystem aligns with Fidelity International’s commitment to innovation.”
He added that partnering with asset managers like Fidelity International is essential for accelerating institutional adoption.
The investment further strengthens Hedera’s push into institutional markets by leveraging its high-throughput infrastructure. The network’s ability to provide low-cost, fixed-fee transactions makes it an appealing option for financial institutions exploring tokenization.
The collaboration between the HBAR Foundation, Archax, and Fidelity International reflects a broader industry shift toward blockchain-powered financial products. As more institutions explore tokenization, partnerships like this could pave the way for greater adoption of digital asset infrastructure in traditional markets.
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QCP Insights: Solana Faces Pressure Ahead of 30 Million Token Unlock
QCP Insights for Feb. 19 showed that inflation fears and escalating tariff tensions continue to dominate global market sentiment.
While the 10% tariff on select Chinese goods is now in effect, the proposed 25% tariffs on Canada and Mexico remain uncertain amidst the steel and aluminum tariff hike set for March 12. Despite these concerns, equities continued to rise, and volatility remained subdued.
However, crypto markets continue to trade sideways, due to increasing sell pressure. Solana faces downward pressure ahead of a 30 million token unlock on March 1, compounded by hedging flows tied to FTX-related SOL holdings. This has contributed to broader weakness in BTC and ETH.
Adding to market turbulence, Argentina’s memecoin LIBRA surged to a $4 billion valuation following a presidential endorsement, only to collapse 89%, leaving retail investors with massive losses.
Meanwhile, Michael Saylor’s Strategy did not add to its bitcoin holdings for the second consecutive week. However, the firm plans a $2 billion private offering to expand its BTC position.
Despite these headwinds, bitcoin remains resilient at around $95,000, though it lacks short-term catalysts to push higher.
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Bitcoin on Short Squeeze Watch? Potential $1 Billion Liquidations in Play
Bitcoin is getting close to a massive short squeeze, with liquidations nearing a huge $1 billion.
If Bitcoin moves up toward the $100,000 mark, short-sellers could face major losses, and this might kick off a market rally.
Over the past weeks, an imbalance has formed. Most traders were initially betting prices would go up, but they switched to betting prices would go down (flipped to shorts) as Bitcoin had a hard time moving higher.
Now, this change could prepare for a sharp price surge, which would jolt those betting against the market.
Related: Crypto Market 2025: Analysts Say Bull Cycle May Be Just 100 Days Away
According to an analyst, if Bitcoin breaks above key resistance at $98,000, the price could quickly jump to $101,000 or even higher. This surge could trigger a massive short squeeze, with liquidations from those betting against the market—possibly reaching $800 million at $101,000.
If Bitcoin climbs to around $100,000, a minor pullback could occur before surging through key resistance points at $103,000 and $105,000. However, Bitcoin could keep going even higher, with liquidations helping to push the price up.
The key takeaway is that the liquidations aren’t concentrated at higher levels anymore; they’re now sitting around $100,000 to $102,000. This means once Bitcoin crosses those levels, momentum could quickly drive the price toward $108,000 and even further.
This shift is important for altcoins as well. Bitcoin dominance may see a brief spike as the market tests new highs, but once Bitcoin faces a minor pullback, money will likely flow back into altcoins.
Total 3, which tracks altcoin performance, has already bounced back from an important zone, and breaking through this zone could trigger major altcoin movement. The real opportunity is with altcoins, as Bitcoin’s rise is likely to be followed by a bigger rally in altcoin markets.
Related: Four Utility Altcoins to Rally in These Final Bull Run Months
According to the analyst, now is a good time to accumulate Solana (SOL) as liquidations sit around $200.
Injective (INJ) might soon break out, leading to a short squeeze towards $20-$21.
Cardano (ADA) and Avalanche (AVAX) are also showing trend breaks. Thorchain (RUNE) presents a strong risk/reward trade, with the price possibly reaching $2-$4.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.