- Solana (SOL) faced a 40% selloff risk, based on bearish technicals.
- The hacker attack on nearly 8,000 Solana wallets resulted in $7 million stolen funds.
- With Solana exploit ongoing, experts believe cold wallets are the right choice for investors.
YEREVAN (CoinChapter.com) — Solana’s hacked wallets depleted $7 million worth of reserves on August 2, leaving its native token SOL with a 40% price decline risk.
SOL daily chart spells trouble
In detail, the SOL/USD exchange rate has been forming a “Rising Wedge,” a bearish reversal pattern confirmed by two rising, converging trendlines.
If SOL confirms the pattern by breaking below the support, the decline would equal the formation’s maximal swing, setting the target price at $23, or 40% lower than the current value.
Also read: Hackers drain Nomad token bridge of $190M.
Moreover, the trading volume divergence confirmed the selloff fears, showing a decline in trading volumes despite the price action’s higher highs.
In addition to the unfavorable technicals, Solana faced a continuous wallet attack.
Solana hacked status could boost selloff
Solana has become the target of the crypto sphere’s latest hack after users reported that funds had been drained from internet-connected “hot” wallets.
The attackers got hold of 7,767 Solana private keys. Users claim that the culprits removed wallet funds without their involvement and siphoned out more than $7 million worth of SOL, SPL, and other tokens as of Aug. 3.
There’s no evidence hardware wallets have been impacted – and users are strongly encouraged to use hardware wallets. Do not reuse your seed phrase on a hardware wallet – create a new seed phrase. Wallets drained should be treated as compromised and abandoned.the team commented on the Solana exploit
The Solana exploit cause remains unclear.
But some experts, like Emin Gün Sirer, founder of blockchain Avalanche, pointed out that the transactions were properly signed. The hack could be a “supply chain attack” that stole users’ private keys.
The expert agreed that the best explanation is “potential nonce reuse that reveals the private key.”
As the Solana exploit origins are unclear, many investors will likely feel discouraged with the blockchain and withdraw to secure their funds. Coupled with the bearish technicals and the unfavorable sentiment on the broader market, SOL is primed for more pain in the coming weeks.