Solana is experiencing significant bearish momentum, with its price dropping by over 6% in the last 24 hours. The price of SOL has fallen below the $160 mark, reaching its lowest point since November 2024. Market participants are growing increasingly concerned, especially with nearly $2 billion worth of SOL tokens scheduled to enter the market next week as part of the FTX bankruptcy auction. Many are now speculating whether Solana’s price could decline further to the $100 level. Amid this uncertainty, PumpFun, a popular meme coin launchpad, has introduced a new Automated Market Maker (AMM) system. But the question remains: can this new development help stabilize SOL's falling price?
Key Factors Behind Solana's Recent Price Decline
Several elements are contributing to SOL's downward trend. The most immediate factor is the upcoming release of a large volume of SOL tokens linked to the FTX estate liquidation. This has created anticipation of a supply shock, which often leads to lower asset prices due to increased selling pressure.
Additionally, negative market sentiment has been fueled by reports of malicious actors using Solana-based meme coins to launder stolen funds. These events have eroded trader confidence and resulted in reduced buying activity across the ecosystem.
Technical indicators also point toward a bearish structure. SOL recently broke below a critical support zone between $167 and $169, which has historically served as a stabilization level. The breach of this level suggests that further downside may be imminent.
Understanding PumpFun’s New AMM Initiative
PumpFun, a platform that enables creators to launch meme coins on the Solana blockchain, is currently testing its own Automated Market Maker (AMM) liquidity pools. This initiative aims to allow decentralized trading directly on the launchpad, reducing the need for external decentralized exchanges (DEXs) like Raydium.
A beta version of this AMM is already accessible on the PumpFun website, offering users a swap interface to trade SOL against various meme coins. By integrating native liquidity pools, PumpFun seeks to make meme coin trading faster and more efficient, which could potentially increase platform revenue and attract more users.
Since PumpFun has been a significant driver of activity on the Solana network, a successful AMM rollout could stimulate higher demand for SOL, possibly aiding a price recovery.
Will SOL Price Drop to $100?
As of today, SOL is trading around $159, reflecting a 6% daily decline and a 35% decrease over the past month. This sharp correction has led many analysts to predict that SOL could test the $100 support level in the near term.
One market analyst noted that Solana appears structurally bearish after losing the $167–$169 support range. With buying interest remaining subdued, the price could slide toward the $112–$126 zone. If selling pressure intensifies, a drop to $100—or even lower—becomes increasingly likely.
Another headwind includes the anticipated unlock of 11.2 million SOL tokens next week. If these tokens are sold immediately upon release, it could exacerbate the ongoing downtrend. However, if institutional buyers who acquired these tokens in the FTX auction decide to hold rather than sell, it might help curb further declines.
The Impact of Long Liquidations on SOL’s Price
Liquidations of long positions are adding downward momentum to SOL’s price. A liquidation map indicates a high concentration of long liquidations between $120 and $160. When leveraged long positions are liquidated, traders are forced to sell their holdings, creating additional selling pressure.
Recent data shows that SOL’s drop to $160 on February 24, 2025, triggered over $21 million in long liquidations. If the price continues to fall, these liquidations could accelerate, pushing SOL into a steeper decline.
Technical Indicators and Market Sentiment
The Relative Strength Index (RSI) for Solana has fallen to 30, indicating that the asset is currently oversold. While this often suggests that selling pressure may be exhausted, it does not guarantee an immediate reversal. For a meaningful recovery, buyers must step in with significant demand.
Solana’s price action has also been confined within a descending parallel channel on the daily chart—a pattern typically associated with bearish trends. A breakout above the upper boundary of this channel could signal a potential reversal, whereas a breakdown may lead to further losses.
Traders are advised to monitor these technical levels closely and practice strict risk management given the current market volatility.
Frequently Asked Questions
Why is Solana’s price falling so sharply?
Solana is facing a combination of negative factors, including an upcoming large token unlock from the FTX estate, adverse market sentiment, and technical breakdowns below key support levels. These elements have led to increased selling and cautious buying behavior.
Can PumpFun’s AMM help SOL recover?
PumpFun’s new AMM could enhance meme coin trading efficiency and increase network usage, which might boost demand for SOL. However, its impact may be limited if broader market conditions remain bearish.
What is the next major support level for SOL?
After breaking below the $167–$169 zone, the next significant support level is near $155. If selling continues, SOL could test lower supports at $126 or even $100.
Is Solana a good investment during this downturn?
Market conditions are highly volatile, and investing during a downturn carries risk. It’s essential to evaluate real-time market data and consider both technical and fundamental factors before making investment decisions.
How do long liquidations affect Solana’s price?
When long positions are liquidated, holders are forced to sell their SOL, increasing market supply and pushing the price lower. This creates a negative feedback loop that can intensify downward trends.
What should traders watch in the coming days?
Key factors to monitor include the market’s response to the FTX token unlock, changes in the RSI and channel patterns, and overall sentiment shifts in the cryptocurrency market. Staying informed with live trading metrics can also help in making timely decisions.