Solana (SOL) fell 7.50% over the past 24 hours to around $142 on March 7, reflecting losses across the cryptocurrency market.
SOL/USD 4-hour price chart. Source: TradingView
Here are the main reasons for lowering today’s Sol prices:
Digital Asset Stockpiling can’t impress Solble
Solana prices have fallen today as Crypto Markets responds to President Donald Trump’s executive order to establish a US strategic Bitcoin reserve and digital asset stockpile.
What I Know:
Investors were hoping that the US government would actively purchase Bitcoin and other cryptocurrencies, but the order did not designate a new acquisition that exceeded the assets already confiscated.
Trump has fulfilled his campaign promise to establish a Bitcoin Reserve, which will consist of BTC, already owned by the federal government.
Secretaries of the Ministry of Finance and Commerce may explore “budget neutral strategies” to acquire more Bitcoin in the future, without using taxpayer funds.
The broader digital asset stockpile focused on Altcoins does not include purchasing new tokens.
The US holds approximately $17.7 billion in Bitcoin and $400 million in seven other tokens, primarily seized from civil and criminal cases.
The government has not revealed Sol Holdings so far, but analysts say the amount they hold is likely “very small.”
Source: Moon Lambo
Solana’s funding rate is reversed to negative
Solana’s open profit (OI) is declining, the funding rate is negative, providing insight into why Sol’s prices are struggling.
Key Points:
Solana’s OI on Futures Market drips from $8.57 billion from its local peak on January 17th to $4.03 billion as of March 7th.
The OI measures the total number of unpaid futures contracts, suggesting that the decline has resulted in more traders being sent off.
Sol Futures Open Interest. Source: Coinglass
A decrease in OI usually means a decrease in speculative demand, slowing down momentum in rising prices.
Sol’s weekly funding rate fell to -0.20% on March 7th, three months after peaking at 1.37%.
Sol oi weighted funding rate. Source: Coinglass
Solana Price Eyes is another 25% drop
Sol has dropped more than 50% since it established a record high of around $295.30 in January. It appears that there will be more room for decline in the coming weeks.
Key Points:
Sol Price fixes what looks like a falling wedge, a classic bullish inversion pattern, but it needs to be confirmed.
$106, down 25% from current price levels, appears to be Solana’s important shortcoming target.
Levels coincide with 0.382 Fibonacci retracement, 200-week exponential moving average (200-week EMA, blue waves), and wedge apex.
SOL/USD weekly price chart. Source: TradingView
A relative strength index (RSI) of 42.03 signals further downside potential before reaching an oversold state.
The trading volume remains weak, indicating that interest on purchases is low.
A break above the top trend line of the wedge can undermine the risk of a decline to $106 for the sol, and instead sends the price to the A level at a length equal to the height of the wedge.
Related: Despite Memecoin Meltdown, SolanaDex volume is still rival Ethereum: Vaneck
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
