The drop reflects broader weakness in altcoins as geopolitical shocks and technical signals converge to weigh on price action.
Geopolitical Tensions Spark Market-Wide Selloff
The primary catalyst behind today’s decline is a risk-off reaction to renewed Israel-Iran conflict. Reports of Israeli strikes on Iranian targets triggered a sharp drop in crypto markets, with total market capitalization falling by $240 billion in a single day (CoinMarketCap). Solana followed the broader trend, with its decline aligning with $503 million in total crypto liquidations — including $183 million from Ethereum alone.
Historically, altcoins like Solana tend to underperform during geopolitical crises due to their higher beta and volatility. Investors often retreat to more stable assets such as Bitcoin or exit risk markets altogether during such events.
Technical Rejection and Key Support Breakdown
From a technical standpoint, Solana faced strong resistance at the $147–$155 range and failed to reclaim its 50-day SMA, currently at $160.65. The 78.6% Fibonacci retracement level at $147.38 also acted as a ceiling, leading to a breakdown amid increasing bearish momentum:
- MACD Histogram: -1.10, confirming downward pressure
- RSI (14): 36.92, nearing oversold territory but with no bullish divergence
The next level to watch is the June 20 swing low at $136.51. A break below this could trigger stop-loss cascades, potentially pushing SOL toward the $130 region.
Altcoin Underperformance as Bitcoin Dominance Climbs
Solana’s drop also reflects broader altcoin weakness. Bitcoin dominance has surged to 64.24%, its highest since January, as capital shifts away from altcoins. CoinMarketCap’s Altcoin Season Index reads 19/100 — firmly in “Bitcoin Season” territory.
Despite positive headlines, such as Solana’s inclusion in Wyoming’s WYST stablecoin project, macro forces continue to dominate. SOL’s 30-day correlation with Bitcoin has risen to 0.89, leaving it particularly vulnerable to Bitcoin-led drawdowns.
Conclusion
Solana’s recent decline is the result of a trifecta of factors: global political unrest, bearish technicals, and a market rotation favoring Bitcoin over altcoins. Unless risk sentiment stabilizes and technical indicators reverse, further downside toward key support levels remains a risk in the near term.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/solana-why-the-price-is-dropping-today/