Investors in Solana are confronting a severe test of confidence as fear grips the market. This sentiment shift was triggered by a significant security incident at Upbit, a leading Asian cryptocurrency exchange, derailing hopes for a price recovery. With the asset’s value hovering perilously close to a crucial support level and institutional capital exiting, a critical question emerges: Is this the start of a more profound downturn or merely an exaggerated panic response?

Institutional Confidence Wavers

The bearish pressure on Solana is not solely driven by retail fear. A notable shift is occurring within institutional circles. Solana spot ETFs, which previously provided a steady stream of buying pressure, have recorded their first net outflows. Recent data indicates that over $8 million has been withdrawn from these funds. This institutional retreat compounds existing challenges, creating a multi-faceted headwind for the digital asset.

Upbit Hack Sends Shockwaves

The immediate catalyst for the sell-off is a security breach at South Korea’s largest digital asset platform, Upbit. Reports confirm that hackers successfully compromised a Solana-based hot wallet, making off with digital assets valued at more than $30 million. In response, the exchange has temporarily suspended all deposit and withdrawal functions for the Solana network. This move has injected significant uncertainty into the market, prompting a wave of caution among retail investors and fueling the selling pressure witnessed over the past day.

Should investors sell immediately? Or is it worth buying Solana?

Key Metrics Signal Cooling Interest

On-chain analytics provide further evidence of a deteriorating market environment. Key indicators show a noticeable cooldown in network engagement and activity:

• Active Addresses: The number of daily active addresses on the Solana network has declined by 6%.
• Transaction Fees: A 16% drop in network fees suggests that the meme coin frenzy, which previously drove substantial transaction volume, has temporarily subsided.

Critical Price Support in the Balance

From a technical analysis perspective, the situation is becoming increasingly tense. SOL is engaged in a fierce battle to defend the vital $140 support zone. Trading at approximately $142, the cushion above this level is exceptionally thin. Market analysts warn that a decisive break below this support, driven by the current negative news flow, could trigger a swift decline toward the $122 level.

While Solana maintains its fundamental dominance in the tokenized real-world assets (RWA) sector, this long-term strength is currently being overshadowed. The immediate focus for investors remains squarely on a single issue: whether the $140 support level will hold firm or if a broader market capitulation is imminent.

Ad

Solana Stock: Buy or Sell?! New Solana Analysis from November 30 delivers the answer:

The latest Solana figures speak for themselves: Urgent action needed for Solana investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 30.

Solana: Buy or sell? Read more here...