Solana (SOL) Experiences Significant Price Drop
Solana (SOL), the seventh largest cryptocurrency, recently faced a sharp decline in its price following a four-day winning streak that led to a 14-month high of $46.97 on November 1st. As of the time of writing, SOL was down by 11.79% in the last 24 hours, trading at $38.48. This marks the second consecutive day of losses for Solana after an impressive surge in price on November 1st.
Throughout the year, Solana has exhibited remarkable growth, with its value soaring by more than 250% year to date. In the last month alone, the cryptocurrency witnessed an 80% increase, as reported by on-chain analytics data provider Lookonchain.
The current crypto market is experiencing losses due to profit-taking, with Solana being one of the top losers among the top 100 cryptocurrencies by market capitalization.
Likely Reasons for Solana’s Price Decline
The exact cause behind Solana’s recent price drop remains uncertain. However, several factors seem to have contributed to this decline:
- Trend Analysis: Lookonchain identified a trend near the Solana breakpoint event, where the price of SOL peaked during the event and subsequently dropped. Similar patterns were observed in previous years.
- FTX Sell-off: FTX, a major crypto exchange, has been selling SOL over the past 10 days, transferring out significant amounts. In the last 24 hours alone, 1.1 million SOLs worth $42.35 million were sold, contributing to the downward pressure on SOL’s price.
- Long Squeeze: Solana’s price decline might be attributed to a long squeeze, a situation where a sudden drop in market price prompts long traders to sell or liquidate their assets.
Prior to the price dip, Lookonchain reported, based on CoinGlass data, that more traders had taken long positions on SOL on Binance, the world’s largest crypto exchange, compared to short positions. Long positions are assumed by traders who anticipate a rise in the asset’s value over time.
Interestingly, these developments occurred following a bullish report by global asset manager VanEck, which outlined a scenario in which Solana’s price could reach $3,200 by 2030.