Solana Price Prediction: Confirmed Bearish Breakout Below $96 Sets Stage for 15% Drop

Solana (SOL) has dipped by 7% in the past 7 days, as the latest downtrend in the crypto market has accelerated following news that the world’s largest crypto exchange, Binance, suffered a massive hack.

Last week, the company announced that $6.3 billion was stolen from its wallets. Although most of that amount has been replenished through ongoing recovery efforts and the firm’s SAFU reserve, the selling pressure has increased in the past few days.

Over $1.7 billion worth of long positions were liquidated last week after Binance confirmed the hack. Although the market briefly bounced on Friday, bearish momentum accelerated during the weekend, pushing SOL below a key support at $96.

This could set the stage for the continuation of the downtrend that started in early October and could push the token down to the low 80s, as the market may be aiming to fill a price imbalance left behind by the late-August rally.

Net Inflows to Solana ETFs Swung to Negative Territory in October

Net inflows to exchange-traded funds (ETFs) linked to Solana swung to negative territory last month, with net outflows finishing at $144 million.

This represents a major shift compared to the $272 million that investors poured into these vehicles in September and broke a two-month streak of strong growth in this front.

Although the Federal Reserve opted to keep rates unchanged last month as the market expected, Binance’s hack could have had a negative impact on investors’ sentiment, as the incident highlights the persistent risks that continue to plague the industry.

Meanwhile, earlier today, Binance announced that customers took out around $3.6 billion from its platform after the exchange re-enabled withdrawals.

The Crypto Fear and Greed Index confirms a sentiment shift, as it dropped to 36 — entering Fear levels for the first time since mid-August, just days before the rally started.

Turning to on-chain data, we can see that ecosystem activity has been steadily declining for five weeks in a row. DEX volumes have experienced a 41% decline during this period, moving from $17.3 billion to $10.2 billion as of last week.

Paired with a sector-specific headwind like the Binance hack, the correction that SOL experienced in the past month could accelerate, as investors question the safety of their funds following a wave of high-profile hacks to exchanges, cold wallets, and top protocols.

SOL Could Drop to $77 After Losing the $96 Support

Turning to the daily chart, Solana just broke below the 200-day exponential moving average (EMA) and lost the $96 support shortly afterward.

This confirms that sellers are in control of the price action and could catalyze a move to much lower levels in the next few days, as long positions continue to get blown up.

We believe that the market could be aiming to fill, at least partially, the large fair value gap (FVG) that it left behind during the August rally, as a significant volume of buy orders could still be sitting at this area.

Hence, SOL could dip to a range between $83 and $77 in the next few days, meaning a total downside risk of 18%.