The Impact of Pump.fun’s 65K SOL Token Dump on the Solana Market
Despite Solana [SOL] experiencing a recent downtrend, Pump.fun has initiated a substantial transfer of assets to exchanges. Reports from Lookonchain reveal that Pump.fun has deposited 65,000 SOL tokens valued at $15.23 million into Kraken.
In the most recent transactions, Pump.fun has contributed a total of 798.869 SOL tokens, equating to $154 million, to the Kraken platform. Additionally, it has liquidated 264.373 SOL for $41.64 million USDC. Notably, since the inception of Pump.fun’s operations, it has accumulated 1,526,937 SOL amounting to $362 million.
Historically, when major stakeholders like Pump.fun offload their holdings, it typically exerts pressure on prices. The pivotal question remains – has this occurred?
Analyzing Price Trends
As predicted, Solana has encountered a market correction within the last 24 hours, witnessing a decrease from $245 to $243 at present.
This shift reflects a 0.82% daily decline. Moreover, on a weekly scale, the altcoin has experienced an 8.28% drop. Preceding this, SOL had been on an upward trend, surging by 33.72% in monthly forecasts.
The existing market conditions, especially with amplified sell-offs by significant holders, raise concerns regarding potential further downtrends for Solana.
As per CryptoCrypto’s evaluation, a shift in market sentiment is discernible for Solana. Following a record high of $264, the altcoin plummeted to a low of $221.
Recent price actions indicate a predominance of sellers in the market, with a gradual escalation in downward momentum.
The Relative Strength Index (RSI) depicts a fall, concurrent with a spike in its Moving Average (MA). A declining RSI typically signifies an emerging market dominance by sellers, indicating higher selling pressures in contrast to buying pressures.
As a result, sellers have prevailed over the last four days, with the MA displaying a bearish crossover, indicative of waning buyer momentum.
This weakening momentum is further illuminated by the Relative Vigor Index (RVGI) registering a bearish crossover three days prior.
Diving deeper, Solana’s Long/Short Ratio showcases an ascendancy of short positions in the market. Short positions currently account for 52%, suggesting a prevalent bearish sentiment among investors who anticipate price depreciations.
Lastly, Solana’s Open Interest (OI) per exchange has dwindled over the prior week from $2 billion to $1.5 billion. This descent in OI implies that investors are closing positions while fresh market participants remain scarce.
In essence, while Pump.fun’s transaction may have triggered fluctuations in price trends, the broader SOL market is witnessing an escalating bearish sentiment. Consequently, if this negative outlook persists, Solana could witness a downturn in valuation.
If such a decline materializes, SOL might potentially retreat to $220. Conversely, a resurgence in bullish sentiment could propel the coin to reattain the $260 barrier.