The cryptocurrency market has indeed seen better days than the past week, but the Solana price has particularly struggled to contend with the broad downward pressure. This sluggish price action could be linked to the major DeFi exploit that rocked the ecosystem, causing the outflow of more than $270 million in value. According to the latest on-chain data, the Solana price could see even further pressure as exchange inflows spike.
$110 Million Of SOL Flow To Centralized Exchanges In 3 Days
In an April 4th post on the social media platform X, crypto analyst Ali Martinez shared that significant amounts of the Solana token have been moved to centralized exchanges over the past few days. This on-chain observation has caused a warning alarm to go off on the potential price trajectory of SOL, especially considering the already not-so-optimistic market climate.
The relevant indicator here is the Exchange Balance metric, which tracks the amount of a particular cryptocurrency available on centralized exchanges at a given time. This on-chain metric provides some level of insight into the current demand and supply dynamics in the crypto open market.
Hence, a rise in the value of this metric suggests that more market participants are sending assets to exchanges, which could imply that supply might be overwhelming the available demand. This trend could be bearish for an asset’s value (the Solana price, in this case), as it could be an indication of increasing selling pressure.
Source: @alicharts on X
According to Glassnode data highlighted by Martinez, 1.40 million Solana, valued at approximately $110 million, were transferred to centralized exchanges in the last 72 hours. As inferred earlier, coin movements of this magnitude are often red flags in the market, as they could be a potential source of bearish pressure on price.
The rationale behind this conclusion is that one of the major services offered by centralized exchanges is a platform for investors and traders to offload their digital assets. Hence, this latest increase in the exchange inflow can be linked to a rise in selling pressure on the Solana price.
Solana Price At A Glance
Interestingly, the Solana price fell below the psychological $80 support after reaching the local high of around $85. As of this writing, the price of SOL stands at around $80.8, reflecting no significant change in the past 24 hours. According to data from CoinGecko, the altcoin’s value has been down by more than 3% in the past seven days.
The price of Solana on the daily timeframe | Source: SOLUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView
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