Why Is Solana Crashing? Can SOL Recover After a 40% Monthly Drop?

Table Of Contents

Key Reasons Behind Solana’s Price Crash
Can Solana Recover From This Correction?
Market Sentiment and Community Predictions
Technical Outlook for SOL
Final Thoughts

Solana (SOL) has experienced a sharp price correction over the past few weeks, raising alarm across the crypto market. As of now, SOL is trading around $123.47, showing a 3% decline in a single day and over 10% in the past week. But what’s drawing even more attention is the massive 40% drop over the last month, plunging from $137.83 to a low of $113.76.

So, what’s really behind this steep decline, and can Solana recover in the near term?

Key Reasons Behind Solana’s Price Crash

1. Heavy Whale Withdrawals and Sell-Offs

One of the primary triggers for Solana’s ongoing price drop is the significant movement of large volumes by whales. On March 11, a single wallet withdrew 195,000 SOL worth over $23 million from exchanges like Bybit, OKX, and Gate.io — sparking fears of a major sell-off.

In the days leading up to this, there were several massive transfers involving millions of SOL. For example:

Over 1 million SOL was moved from Kraken to an unknown wallet on March 7.
Multiple wallets exchanged nearly 2 million SOL between March 6 and March 8, further indicating liquidity shifts and growing uncertainty.

These movements suggest that large investors may be reducing exposure to Solana, possibly reallocating their funds to more stable assets like Bitcoin.

2. Macroeconomic Pressure and Policy Uncertainty

Global market conditions are also contributing to Solana’s downturn. Rising economic uncertainty, fueled by trade policy speculation, is affecting investor sentiment across the board. Former U.S. President Donald Trump’s proposed tariffs have raised inflation concerns, which could impact overall investment in riskier assets like cryptocurrencies.

In addition, the recent announcement of a crypto strategic reserve failed to inspire confidence, adding to the broader bearish mood in the market.

3. Selling Pressure from FTX Estate

Another important factor is the ongoing liquidation from the FTX estate. Since March 1, large volumes of tokens — including SOL — have been unlocked and sold, adding significant downward pressure on prices. With more tokens entering circulation, existing supply-demand dynamics are being challenged, intensifying volatility.

4. Bearish Market Indicators and Price Chart Breakdown

Solana’s price has broken below critical support levels, signaling a continuation of the bearish trend. According to technical analysts, SOL’s fall below the $125 mark could lead to further downside.

Well-known analyst Ali Martinez has warned that if selling continues, Solana could test lower support levels at $116, $100, or even $80. A drop toward the $60–$70 range is also being considered by some market watchers based on historical price patterns.

Can Solana Recover From This Correction?

While some traders are hoping for a rebound, the outlook remains uncertain. For Solana to shift momentum and begin a recovery, it must first reclaim the $140 level. A break above this point could pave the way for a rally toward $160 or higher, but this would require a strong surge in buying activity and improved market sentiment.

Currently, resistance levels are seen near $150, $180, and $260. However, without a clear bullish catalyst or significant inflow of investor interest, a recovery remains challenging in the short term.

Market Sentiment and Community Predictions

According to data from Polymarket, only 8% of participants believe Solana will cross the $150 mark by mid-March, with the vast majority expecting continued weakness. This indicates that broader market sentiment is still leaning bearish.

Technical Outlook for SOL

Chart patterns and technical indicators further support the bearish case. Volume remains low, and momentum indicators suggest that sellers are still in control. Unless there’s a shift in broader market dynamics, Solana may continue to face headwinds in the near future.

Final Thoughts

Solana’s recent price crash is driven by a mix of whale activity, market-wide volatility, and ongoing token sell-offs. While recovery is still possible, it will depend heavily on future market developments and renewed investor interest.

Until then, traders should watch key support and resistance levels and stay alert for any shifts in volume or sentiment that could signal a potential turnaround.