Why is Solana (SOL) price down today?
Solana (SOL) has dropped by 6.5% in the last 24 hours to reach around $127 on March 17, mirroring losses across the cryptocurrency market.
SOL/USD daily chart. Source: Cointelegraph/TradingView
The top reasons driving the SOL prices lower today include:
· Decreasing investor interest in SOL’s decentralized finance (DeFi) ecosystem.
· Decreasing open interest and negative funding rates.
· Technicals suggest a possible further drop in SOL price.
**Solana TVL hits four-month lows**
SOL’s price drop today is preceded by a drop in the total value locked (TVL) in its DeFi applications, as per data from DefiLlama.
Key points:
· Solana’s TVL has been in a downtrend since mid-January.
· This metric fell by 45.5% from $12.1 billion on Jan. 19 to $6.63 billion on March 11.
· The TVL now stands at $7 billion on March 17, 41% below the Jan. 19 peak.
Solana total value locked. Source: DefiLlama
· This drop in TVL occurred in tandem with the decrease in SOL’s price, which is down 56% over the same period.
· Several layer-2 protocols, such as Jito and Raydium, have posted 30% and 32% drops in TVL over the last 30 days.
· The declining TVL reflects traders’ waning interest and could be a sign that Solana struggles to attract new users despite its lower traction costs.
Solana’s price slump is also supported by a decline in onchain activity within the Solana ecosystem, according to the data provided by Dune dashboard Pump.fun.
What to know:
· A sharp drop in the number of network transactions preceded SOL’s price drop on March 17.
· The amount of daily transactions on the Solana blockchain has dropped from an all-time high of 71,738 on Jan. 23 to 24.505 on March 17, as shown in the chart below.
Solana’s deployed transactions performance chart. Source: Pump.Fun
· This indicates decreasing network activity, resulting in lower revenues from fees.
· This negatively affects SOL’s price, partially explaining the ongoing correction.
**Solana funding rates remain negative**
Solana's open interest (OI) is decreasing, and its funding rates are negative, which provides insight into why SOL’s price is struggling.
Key points:
· Solana’s OI in the futures market has dripped from its local peak of $8.57 billion on Jan. 17 to $4.03 billion as of March 17.
· OI measures the total number of outstanding futures contracts, and a decrease suggests more traders are exiting positions.
SOL futures open interest. Source: CoinGlass
· A declining OI typically means reduced speculative demand, slowing upward price momentum.
· SOL’s weekly funding rates remain negative at -0.10% on March 17, four months after peaking out at 1.37%.
SOL OI-Weighted Funding Rate. Source: CoinGlass
· Negative funding means shorts are paying longs to keep their positions open.
· OI decline and negative funding rates show a lack of confidence in SOL’s short-term price action.
*Related: **Solana’s 5th birthday: From pandemic origins to US crypto stockpile*
**SOL price could drop another 35%**
SOL trades 56% below its all-time high of around $294, established on Jan. 19, and chart technicals suggest that there’s more room for the downside over the next few weeks.
Key levels to watch:
· The altcoin has been trading above the $120 level, but the bulls have failed to push the price above $135.
· If the price slides below $120, the SOL/USDT pair could drop to the $110 range low (established on Aug. 5, 2025).
· This is a critical support to watch out for because a break and close below it may start a downward move to $100 and then to $80.
· Such a move would represent a 35% drop from the current price.
SOL/USD daily chart. Source: Cointelegraph/TradingView
· However, a positive divergence from the RSI shows that bulls have been accumulating SOL at lower levels.
· A break and close above the $140 psychological level will suggest that the selling pressure is reducing.
· The pair could rally to the 50-day simple moving average at $171, where the bears are expected to mount a strong defense.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.