Solana’s price is facing significant downward pressure today, with the cryptocurrency dropping 7.35% to $157.25, marking its lowest level since November 6. The decline comes amid growing concerns over Solana’s ecosystem, including its association with security breaches, rug pulls, and weakening trader sentiment.

The broader correction began on January 19, when SOL reached an all-time high of $295.31. Since then, the price has plunged 47%, erasing nearly all its post-Trump reelection gains. Several key catalysts are driving this downturn.

One of the major factors affecting SOL’s price is its alleged ties to North Korea’s notorious Lazarus Group. On-chain investigator ZachXBT linked wallets associated with the recent $1.4 billion Bybit hack to fraudulent activity in Solana-based memecoins, raising concerns about security risks. These same wallets were also connected to the $29 million Phemex hack in January, further damaging Solana’s reputation.

Additionally, Solana has seen a rise in memecoin scams, including the $107 million rug pull of the Libra token. The increasing number of scams is discouraging new users and investors, leading to declining trust in the network. Since memecoins contribute significantly to Solana’s transaction volume, this reduction in activity is further weakening demand for SOL.

Another major concern is the upcoming SOL token unlock event on March 1, when 11.16 million SOL (worth approximately $1.79 billion) will be released, primarily from the FTX estate. Investors fear that a large portion of these unlocked tokens may be sold, increasing supply and pushing prices lower. Market uncertainty around the potential sell-off has led to cautious trading behavior, with many investors preemptively pricing in the impact.

Adding to the bearish outlook, Solana’s open interest (OI) in the futures market has significantly declined from its peak of $8.57 billion on January 17 to $5.11 billion as of February 24. A drop in OI indicates that traders are exiting positions, reducing speculative demand and slowing upward price momentum. Meanwhile, SOL’s weekly funding rate turned negative, dropping to -0.48% from 0.354% just two days earlier. Negative funding rates suggest that short sellers are dominating the market, further increasing selling pressure.

Technical indicators also point to further downside. Solana has formed a head-and-shoulders (H&S) pattern, a bearish technical formation. The breakdown of the pattern, which began after SOL dropped below $177, suggests that the price could potentially fall toward $110, representing a 30% decline from current levels. However, if SOL manages to reclaim $177 as support, a recovery toward $215 could be possible, invalidating the bearish outlook.

With rising security concerns, increasing sell pressure from token unlocks, and a deteriorating market structure, Solana’s near-term outlook remains uncertain. Investors and traders are closely watching upcoming developments, as further negative news could accelerate the downward trend.