Solana (SOL) has seen its price tumble significantly, with recent trading data showing a sharp decline of over 20% in just 24 hours. This plunge has raised eyebrows among investors and analysts, prompting claims that major market players, or “whales,” are manipulating the price to their advantage.

Market Turmoil and Solana’s Breakdown

The broader cryptocurrency market has been under pressure recently, experiencing a 16% crash due to geopolitical tensions and recent changes in Japan’s interest rate policies. Amidst this market chaos, Solana, the fifth-largest cryptocurrency by market capitalization, has faced a severe drop. On August 6th, SOL breached a crucial support level at $121, causing its price to fall sharply to around $113.

This drop has led to a significant increase in trading activity. Solana’s trading volume surged by over 245% in the past 24 hours, indicating heightened investor and trader participation during this volatile period.

Whale Manipulation Claims

Adding to the drama, a former Coin base angel investor took to X (formerly Twitter) to accuse whales of intentionally driving down Solana’s price. According to this investor, the current price decline is not a natural market reaction but a strategic move by large holders of SOL. The allegation suggests that these whales are pushing the price lower to force retail investors, or “noobs,” to sell off their holdings. The intention, as claimed, is to buy back these assets at a reduced price and potentially sell them at a higher rate once the market stabilizes.

“They are stealing your bags and will make you buy back at a higher price,” the investor warned in their post. This kind of market manipulation theory, while speculative, reflects concerns that large players can exert undue influence over market dynamics.

Financial Impact on Solana Investors

The repercussions of this market maneuvering are evident in the financial losses sustained by Solana investors. In the past day alone, nearly $65 million worth of SOL positions were liquidated. This includes $47.16 million from long positions, where investors had bet on rising prices, and $18.28 million from short positions, where investors had bet on falling prices. This large-scale liquidation highlights the intense market activity and the impact of the price drop on investor portfolios.

Technical Analysis and Price Prediction

From a technical standpoint, Solana appears to be in a bearish phase. The cryptocurrency’s price is currently trading below the 200 Exponential Moving Average (EMA) on a daily chart, a key indicator often used to assess long-term trends. The recent breakdown of important support levels further reinforces this bearish outlook.

Experts suggest that the daily closing price of SOL will be crucial in determining the short-term future of the cryptocurrency. If Solana closes below $122, it may face further declines, with potential support at the $77 level, representing a possible 30% drop from current prices. Conversely, if SOL manages to close above $122, it could indicate a reversal, with potential for the price to rebound to around $155.

The Relative Strength Index (RSI), a popular momentum oscillator, is currently in the oversold territory. This condition often signals that an asset may be due for a price reversal or recovery, although it is not a guarantee.

Market Sentiment and Open Interest

In addition to price and technical indicators, the sentiment and open interest in Solana also provide insight into market dynamics. The open interest in SOL has decreased by 26%, indicating a reduction in investor interest and involvement amidst the current market downturn. Lower open interest during a price decline can signal waning confidence or reduced speculative trading.

Upcoming Liquidation Levels

Looking ahead, analysts have identified key liquidation levels that could influence Solana’s price movements. According to on-chain analytics from CoinGlass, significant liquidation levels are set at $100 on the downside and $130 on the upside. If the market continues to decline and reaches the $100 level, approximately $40.5 million in long positions would be liquidated. On the other hand, if the price rebounds to $130, around $140 million in short positions could be liquidated.

Conclusion

Solana’s recent price drop and increased trading volume have drawn attention to potential market manipulation by large players. The claims of whale manipulation, coupled with the significant financial impact on investors, highlight the complexities of trading in volatile markets. While technical indicators suggest potential for both further declines and a possible rebound, the situation remains fluid.