Solana (SOL) is weakening as the broader crypto market endures large-scale liquidations following Bitcoin’s fall below $87,000, wiping out about $584 million in forced liquidations and roughly $34.5 million of Solana-long positions. The downside is intensified by a $5.5 billion class-action lawsuit against Pump.fun and Jito Labs that has unsettled sentiment around the Solana ecosystem. A U.S. district court’s acceptance of a revised complaint alleging insiders used maximum extractable value bots to front-run retail traders has challenged Solana’s ‘fair launch’ narrative.
The lawsuit risk could deter speculative capital inflows into Solana for the foreseeable future. Solana breached the key support at $119 and fell to $118.10, with the 78.6% Fibonacci retracement at $126.94 failing to hold. The RSI sits at 35.69 and the MACD shows a bearish crossover at -4.83, underscoring renewed downside momentum.
With Bitcoin dominance rising to 59.24% and the market fear index at 22 in the ‘extreme fear’ zone, investors have moved toward perceived safety as they sell Solana. Analysts warn that failure to reclaim the $119–$121 zone could push SOL toward the June low near $112, while any rebound would hinge on BTC stabilization and ongoing developments in the Pump.fun lawsuit. The path ahead remains uncertain as legal developments weigh on sentiment, though some traders see potential value-buying opportunities on oversold levels if conditions stabilize.
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