Why is Solana (SOL) price down today?

Solana’s native token, SOL, has dropped by almost 12.75% within the final 24 hours to a three-week low of $112.50 on April 3.

Key drivers behind SOL’s sharp correction embrace:

• The newest spherical of tariffs from the Trump administration and their potential to erase trillions of {dollars} from the inventory market.

• Adverse SOL futures foundation and funding charges.

• A number of technical elements.

Let’s study these catalysts intimately.

Trump tariffs rattle Solana and broader crypto market

Solana’s decline occurred within the wake of US President Donald Trump’s April 2, “Liberation Day” tariffs. The escalation in commerce tensions led traders to maneuver away from riskier belongings, together with cryptocurrencies like SOL, in favor of safer investments.

Associated: Trump ‘Liberation Day’ tariffs create chaos in markets, recession issues

SOL’s current worth decline is intently tied to fading demand in its futures market, as mirrored by a pointy drop within the annualized rolling foundation on three-month contracts.

The annualized rolling foundation reveals how way more (or much less) futures contracts are buying and selling in comparison with the present spot worth, expressed as an annual share.

A excessive foundation means futures are buying and selling at a major premium, signaling bullish expectations and robust demand for leveraged lengthy positions. Alternatively, a low or adverse foundation means futures are buying and selling near or under the spot worth, indicating a scarcity of speculative curiosity or rising bearish sentiment.

SOL futures foundation peaked in mid-November 2024 at 18% and was under 0% as of April 3, displaying that merchants are now not paying a premium for SOL.

Solana’s funding charges flip adverse

Solana’s worth drop additional aligns with its declining funding charges, indicating a weakening bullish momentum available in the market.

SOL’s weekly funding charges slipped to -0.0462 on April 3 from 0.14% a day in the past, and this adverse funding means quick merchants are paying longs, highlighting the expectation for additional draw back.

At the moment, SOL’s day by day chart reveals a sample of bear flag continuation, a course of the place consecutive bearish constructions affirm and drive costs decrease.

As of April 3, SOL was buying and selling under its flag sample’s decrease trendline, projecting a worth decline to $96.

This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a choice.