Solana (SOL) weakened in a tight liquidity environment, slipping 1.66% in 24 hours to $123.12, lagging the overall crypto market’s 0.82% drop. The fear-and-greed index stood at 30, signaling continued risk-off sentiment. A primary pressure point is liquidity contraction, following Circle’s burn of $51 million in USDC on the Solana network on December 29, a move tied to earlier large-scale USDC removals on Ethereum. Reduced stablecoin supply can dampen on-chain buying power and elevate near-term volatility across the Solana ecosystem.
Technical attention centers on a robust resistance at $130.40, where roughly $149.74 million in short positions concentrate, creating thick selling pressure. The RSI sits at 43.92 in neutral-to-bearish territory, and the MACD remains below the signal line, though the histogram has inched into a small positive zone, leaving a window for a short-term rebound.
Derivative positioning adds another layer of volatility. Around the $122 mark, about $111.42 million in long positions accumulate, meaning a breakdown of this support could trigger cascading liquidations and amplify downside moves. The funding rate is mildly negative at -0.001%, reflecting a subtle bearish tilt across the market.
Taken together, Solana’s drop reflects liquidity pressure, competing at strong resistance levels, and concentrated leveraged positions. In the near term, preserving support around $122 is crucial; if volume returns but fails to clear the $130 area, the market could endure a continued high-volatility regime.
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