Solana’s native token, SOL , has dropped by nearly 12.75% in the last 24 hours to a three-week low of $112.50 on April 3. SOL/USD daily price chart. Source: TradingView Key drivers behind SOL’s sharp correction include: The latest round of tariffs from the Trump administration and their potential to erase trillions of dollars from the stock market. Negative SOL futures basis and funding rates. Multiple technical factors. Let’s examine these catalysts in detail. Trump tariffs rattle Solana and broader crypto market Solana’s decline occurred in the wake of US President Donald Trump’s April 2, “Liberation Day” tariffs. The escalation in trade tensions led investors to move away from riskier assets , including cryptocurrencies like SOL, in favor of safer investments. SOL/USD vs. TOTAL crypto market cap and Nasdaq Composite daily performance chart. Source: TradingView Related: Trump 'Liberation Day' tariffs create chaos in markets, recession concerns SOL’s recent price decline is closely tied to fading demand in its futures market, as reflected by a sharp drop in the annualized rolling basis on three-month contracts. The annualized rolling basis shows how much more (or less) futures contracts are trading compared to the current spot price, expressed as an annual percentage. A high basis means futures are trading at a significant premium, signaling bullish expectations and strong demand for leveraged long positions. On the other hand, a low or negative basis means futures are trading close to or below the spot price, indicating a lack of speculative interest or growing bearish sentiment. SOL futures basis peaked in mid-November 2024 at 18% and was below 0% as of April 3, showing that traders are no longer paying a premium for SOL. Solana futures annualized rolling basis. Source: Glassnode Solana’s funding rates turn negative Solana’s price drop further aligns with its declining funding rates, indicating a weakening bullish momentum in the market. SOL’s weekly funding rates slipped to -0.0462 on April 3 from 0.14% a day ago, and this negative funding means short traders are paying longs, highlighting the expectation for further downside. SOL OI-weighted funding rates. Source: CoinGlass Currently, SOL’s daily chart shows a pattern of bear flag continuation, a process where consecutive bearish structures confirm and drive prices lower. As of April 3, SOL was trading below its flag pattern’s lower trendline, projecting a price decline to $96. SOL/USD daily price chart. Source: TradingView This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
