Solana (SOL) price experienced a 5% drop in its price, reaching $197.29, following a $20 million whale transaction on the Kraken exchange.

The transfer of 98,594 SOL tokens, valued at $20.49 million, occurred at 1:04 UTC+8. The event spurred heightened market activity, reflected in a 51.48% increase in trading volume over the last 24 hours, although the overall sentiment remains bearish.

Whale Activity Triggers Solana Price Decline

The transaction was carried out by a wallet 8sp5im… Rac3sM which belongs to the entity Pump Fun.n. After the transfer, the wallet still contains 15,721 SOL and 101,102 JITSOL tokens worth $27.1 million. Whale activity seemed to increase selling pressure, which led to the decline in Solana’s price during the day.

Pump fun: Fee Account transferred about 98,594 SOL to Kraken at 1:04 UTC+8 today through a wallet: 8sp5im…Rac3sM, worth about 20.49 million US dollars. Currently, pump fun still holds 15,721 SOL and 101,102 JITSOL, with a total value of about 27.10 million US dollars.…

— Wu Blockchain (@WuBlockchain) January 8, 2025

SOL began the day at around $208 and gradually plunged downwards. It touched a session low of $194 and then recovered to $197.29 by the close of the day. This decline is attributed to the large deals and the ensuing investor panic that has characterized the market.

Market Metrics Indicate Volatility During Whale Transaction

Solana’s market capitalization declined by 5.08% to $95.41 billion as investors lost confidence as a result.

This aligns with the 5.48% drop in the price of the token during the same period.However, the trading volume rose by 51.48% to $5.21 billion which could be attributed to the large transaction made by the whales.

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Currently, 81.7% of the total available 590 million tokens are being traded in the market and at present there are 483.65 million tokens. However, the enhanced trading activities depict that the market is more volatile, with the sellers leading the market.

Solana Price Levels to Watch as Key Support and Resistance

The price of Solana illustrates some essential support and resistance levels that are likely to define its near-term trend.

Initial support is the $194 intraday low. If this level gives way, then the next key support is at $190 which also presents a round number resistance to the downside. A pullback below $190 may result in more selling pressure, and the price may decline further.

To the upside, Solana must break through the $200 psychological level to change the tide for the bears. Above this level, we have the $208 level, which was the starting price of the token for the day – this is a very important resistance level. This means that should the price pierce through these levels it would suggest a potential reversal and therefore a buy signal.

Impacts of Whale Trading to the Solana Network

Whale transactions directly affect the price of cryptocurrencies because the market is quite sensitive to large operations.

The transfer of $20 million to Kraken not only led to the selling pressure but also showed the week to week volatility of the crypto market. In the process, Solana faces these challenges, and whether it can hold support above critical levels will be crucial for its recovery.

This makes the trading volume follow the bearish trend as opposed to a gradual increase which indicates high market interest in Solana.

Possible short-term fluctuations are predicted, in the long run. SOL’s potential might depend on the possibility of the renewed interest in buying the asset and maintaining market activity. Traders should keep an eye on the levels of $194 on the downside. While the $200 level can play out on the upside in order to see which direction the token will take.

Solana’s resilience will be tested in the coming days. SOL whale transactions are serving as a reminder of the influence of large market participants. Whether the token recovers or continues its downtrend will largely depend on the balance of buying and selling pressures in the market.