Solana hits 2023 lows amid panic selling: Is a 7% dip just the start of SOL’s pain?

Solana is experiencing one of the largest price crashes amid a broader crypto market downturn. The altcoin breached the $70 support and dropped to a low of $66 before rebounding.

Solana has not dropped to such levels since December 2023. As of this writing, Solana traded at $70.4, down 7.3% on the daily charts, adding to its 13% weekly decline.

As a result of this price dip, $SOL fell below both short-term and long-term moving averages, signaling strong downward pressure.

Solana faces panic exits across the market

With the price decline, liquidation levels for both shorts and longs have accelerated. Total liquidations rose to $83 million, with $78.25 million worth of longs liquidated, reflecting strong downside risk.

Source: Coinglass

With Solana [$SOL] under strong downward pressure, market participants across Spot and Futures panicked and closed their positions.

On the Futures side, rising liquidation levels have pushed many traders to close out to avoid being liquidated. CoinGlass data showed that sellers have dominated the Futures market over the past week.

Source: CoinGlass

In fact, over the past 24 hours, $3.09 billion flowed out of the Futures market compared to $2.8 billion in inflows. As a result, NetFlow dropped to -$281 million.

On longer timeframes, $10.82 billion has flowed out of the Futures market, reflecting heightened bearish pressure.

On the Spot side, market sentiment remains unchanged, and investors have continued to dump $SOL. Over the past 4 hours, for example, Spot Inflow jumped to $115.9 million while Outflow dropped to $92 million.

Source: CoinGlass

The Exchange Netflow rose 309% to $22.9 million. This market behavior also holds on daily charts, with Netfow rising 1165% to $6.88 million.

Such selling activity suggests that most active participants panicked and exited, fearing more losses. In doing so, the market weakened further, resulting in additional losses on price charts.

Is $SOL at risk of more losses?

Solana’s downside momentum intensified as traders panicked and sold. As a result, the altcoin’s Relative Strength Index (RSI) dropped deeper into oversold territory, hitting a three-year low of 22.

At such extremely low levels, RSI suggested that sellers have taken total control of the market. Traditionally, seller dominance has preceded the emergence of an extended market structure, often leading to lower prices.

Source: TradingView

If the current market sentiment persists, the altcoin is likely to see further losses. As such, $SOL will fail to hold $70 and most likely breach $60.

To invalidate this bearish outlook, dip buyers need to set up and absorb the pressure, and reclaiming $80 will help avoid further slip.

Final Summary

$SOL breached the $70 support and dropped to $66, levels last recorded in December 2023.

Solana experienced massive panic selling across all market participants, risking further losses.