- DeFi Development Corp announced a $5 billion equity line to aggressively boost its Solana treasury, but the market reacted negatively, with SOL dropping 10% despite the bullish news.
- Technical indicators point to continued bearish pressure as SOL tests key support levels around $142.
Solana (SOL) slid 10% on Thursday, despite an ambitious announcement from DeFi Development Corporation (DFDV) revealing plans to raise up to $5 billion to fuel further Solana purchases. The steep drop highlights market skepticism, even as the company ramps up efforts to dominate Solana’s ecosystem.
DeFi Dev Corp’s $5B Treasury Push
DeFi Dev Corp, a Nasdaq-listed firm, has secured a $5 billion equity line of credit (ELOC) with RK Capital Management. This move gives DFDV the flexibility to issue and sell shares gradually, taking advantage of favorable market conditions—unlike traditional fixed-price equity offerings.
According to the company, proceeds will go entirely toward acquiring more SOL, reinforcing its bullish stance on the token. Notably, this comes after the company withdrew an earlier $1 billion Form S-3 filing with the SEC in April due to a regulatory technicality involving financial controls.
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As part of its expanding ecosystem involvement, DeFi Dev Corp also announced that its liquid staking token, dfdvSOL, is now integrated with RateX—a yield trading platform on Solana. This allows users to access fixed-yield products, trade yields, and earn liquidity farming rewards.
Market Reaction: Bearish Despite the Bullish Pitch
Despite the bullish development, SOL dropped below the 50-day SMA, struggling to stay above the crucial $142 support level, reinforced by the 100-day SMA. The dip comes after a failed breakout attempt from a descending channel.
Technical indicators paint a grim short-term outlook: the Relative Strength Index (RSI) is below neutral and its moving average, while the Stochastic Oscillator shows SOL in oversold territory—signaling intensified selling pressure.
Bottom Line
Even with DeFi Dev Corp’s aggressive $5 billion strategy, Solana couldn’t dodge Thursday’s broader market downturn. With 11 prior purchases and over $93 million in SOL already held, DeFi Dev Corp is clearly all-in. But unless market sentiment shifts, SOL may face more downside before recovery.