While Solana (CRYPTO: SOL) rallied significantly in the past week taking its position to the top fourth-ranked crypto token, now it is witnessing a drop in price amid falling Total Value Locked (TVL) and profit booking amongst traders.
What Happened: Solana is currently seeing a price correction after witnessing a surge to its highest at $124.70 early this week and highest since April 2022. The drivers of the fall could be traders’ booking profits and capital rotation.
Notably, tokens in the Solana ecosystem are witnessing a drop amid profit-taking after a significant rally.
Read More: Why is BONK Down 15% Today? Solana Ecosystem Tokens Witness Profit-Taking After Rally
Based on Lookonchain data, a whale deposited 303,756 Solana worth $32.8 million in Binance today, possibly selling it for profit. In the past month, the same whale withdrew 423,754 Solana (worth $28.18 million) at $66.50 from Binance leaving behind 119,998 SOL staked while profit crossing $17 million.
Based on Coinglass data, $33.34 million worth of leveraged long positions got liquidated amid trading platforms closing trades due to insufficient margin thereby leading to a drop in Solana’s price. This is compared to around only $20 million worth of liquidations from Dec.23 to Dec.25.
Price Action: In the past 24-hours trade, Solana has witnessed a 7.8% fall with trading volumes narrowing 4.4% in the same time frame. The token in the past seven-day trade saw a 9.5% jump taking its past 30-day trading gains to 72.9%.
BNB (CRYPTO: BNB) over the past seven-day trade saw a 19.9% gain while the past 24 hours saw a 3.7% increase. This takes back BNB to its top fourth crypto token where Solana had moved earlier this week.
Why It Matters: Based on DefiLlama data, Solana’s TVL stood at $1.35 billion as of Dec. 28, compared to $1.49 billion as of Dec. 27 and $1.52 billion as of Dec. 26.
With lesser Solana locked in Solana’s applications, it highlighted more supply somewhere else including crypto exchanges thereby the selling pressure on the market.
Crypto educator and technical analyst Duo Nine went on X and said, “Solana crashed back into two digits. That push above $100 has turned into a BULL TRAP. As long as the uptrend remains intact, there is hope. If SOL follows BONK and breaks BELOW this uptrend. GAME OVER…
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