The Solana (SOL) exchange rate is currently under considerable pressure and threatens to fall further. At the time of writing, SOL is trading at $158.64, after a fall of 6.90 percent in the past 24 hours.

This makes Solana one of the biggest fallers on the crypto market today and threatens to erase out all the gains the currency has made since Donald Trump’s re-election in November.

This morning, the Solana rate briefly dropped to $157.25, its lowest level since November 6. This represents a drop of 7.35 percent compared to the previous day.

These losses are part of a broader market correction that began on January 19, when SOL reached its all-time high of $295.31. Since then, the price has fallen by 47 percent. In this article, we discuss five reasons why Solana is falling.

1. Solana’s alleged ties to North Korea’s Lazarus Group

Solana is under pressure due to growing concerns about its connections to large-scale hacks. The $1.4 billion Bybit hack on February 21 is linked to the infamous North Korean hacker group Lazarus.

Blockchain researcher ZachXBT recently discovered that wallets involved in the Bybit hack are also linked to Solana-based memecoin scams and rugpulls on Pump.fun.

The same wallets also played a role in the $29 million Phemex hack in January. This shows a pattern of fraud within the Solana ecosystem. These hacks and scams have reduced confidence in Solana. This can be seen in lower trading activity on the network and a falling price.

2. Confidence in Solana’s memecoins is declining

The largest Solana memecoins, such as Official Trump (TRUMP), Bonk (BONK) and Dogwifhat (WIF), have suffered major losses, and that has repercussions for Solana. Memecoins make up a large part of the transaction volume on Solana.

Fewer transactions mean less demand for SOL for network fees. Traders previously bought SOL to trade memecoins, to stake them or to provide liquidity. But the recent scandals surrounding political memecoins such as TRUMP and LIBRA have caused a decline in confidence in memecoins. The declining activity around memecoins reduces the buying pressure on SOL.

3. Solana stands for large token unlock on March 1

SOL is under pressure due to an upcoming token unlock. This raises concerns about selling pressure. On March 1, 11.16 million SOL will be released, worth ~$1.79 billion. This is largely from the estate of the bankrupt FTX.

Investors fear that the FTX estate will sell a large portion of these tokens, which will increase the supply and further depress the price. Uncertainty about the impact of this unlock leads to cautious trading and risk-averse behavior.

4. Negative SOL funding rates indicate declining confidence

Solana’s open interest (OI) in the futures market is decreasing, while the funding rates are negative. SOL’s open interest fell from $8.57 billion on January 17 to $5.11 billion on February 24.

OI measures the number of open futures contracts; a decline indicates less speculative demand and waning momentum. SOL’s weekly funding rates fell to -0.48 percent, compared to 0.354 percent two days earlier. Negative funding means that short positions pay long positions, a signal of weak market sentiment.

5. Solana could fall another 30%

SOL’s current price movement fits within a head-and-shoulders (H&S) pattern, which points to further declines.

An H&S pattern has three peaks: a higher central peak (head) between two lower peaks (shoulders) with a common support line (neckline). SOL has fallen through the neckline of ~$177. This increases the risk of a further decline.