Whale deposits $37M SOL to Binance, Solana loses important support

Solana’s cryptocurrency, SOL, has experienced a significant drop of 7.5% within a day, causing it to be traded at approximately $116. This sudden decrease is attributed to a large-scale deposit of 312,000 SOL tokens, valued at over $37 million, to Binance in four consecutive transactions. The repeated testing of the crucial support level at $124, which the cryptocurrency has seen six times in the past year, adds to the concerns regarding a potential sell-off.

The transactions made by the whale have been closely monitored through data provided by SolScan. The initial transaction, involving the unstaking and transfer of 71,448 SOL tokens ($8.54 million) to Binance, was followed by a subsequent transaction only hours later, where an additional 130,985 SOL tokens ($15.5 million) were unstaked and deposited. Furthermore, the same entity unstaked and transferred 112,646 SOL tokens ($13.2 million) to the exchange shortly afterwards.

The consequences of this transaction have had a notable impact on the cryptocurrency’s market cap, which has fallen to $59.48 billion. Charts illustrate that Solana is currently teetering near the lower Bollinger Band at $116.93, indicating a potential oversold state. A potential recovery from this level could see the price aiming for targets between $120 and $124.91, failing which might lead to further downward trends. Resistance levels remain at the middle band of $124.91 and upper band of $132.88.

Technical indicators reveal a lackluster situation for Solana. The Relative Strength Index (RSI) stands at 34.38, suggestive of weak momentum but not entirely oversold yet. A potential dip in RSI could trigger a deeper correction. MACD signals a bearish trend, with the price potentially dropping below the psychological support level of $115, thereby nearing $110 if bearish tendencies persist. The Accumulation/Distribution index hints at mixed market sentiments with some buyers showing interest while significant selling pressures exist, likely exacerbated by the whale transactions.

Solana’s recent struggles have been evident with a 38% decline in value over the past year and a 45% drop in Total Value Locked (TVL) since late January. Prior criticisms from Cardano founder Charles Hoskinson have highlighted the meme coin-driven frenzy within Solana’s ecosystem, characterizing it as being “built to dump.” The performance of the top five Solana meme coins has witnessed a collective plummet of approximately 90% since the beginning of the year.