Solana is experiencing a steep crash. It is now trading below $140 after struggling to stay above $150 just a day ago. Over the past month, it has lost nearly 45% of its value, which has caused panic in investors.
Solana is currently priced at $137.07.90, dropping over 15% in just 24 hours, with a market cap of $67.89 billion and 24-hour trading volume values at $8.78 billion, surging 209%.
Why is Solana crashing down?
The upcoming token unlock on March 1 is one of the major reasons for Solana’s drop in value. In total, around 11.2 million SOL tokens worth about $1.79 billion will be released. The vast majority of these come from the FTX estate. With such a huge supply hitting the market, investors worry that heavy selling could push prices down even further. Many fear that FTX creditors might offload their tokens, adding to the selling pressure.
A few months ago, Solana’s blockchain was booming with meme coin projects. In January, the total market value of these tokens reached $25 billion. But that excitement has worn off, and their combined value has dropped to $9.8 billion. Coins like Dogwifhat, Official Trump, and Pudgy Penguins have lost billions. Since fewer people are trading them, Solana’s network is seeing lower activity, which is affecting its price negatively.
Price movement is terrible for Solana. It broke through a key support level of $169 today with a steep fall. It has also formed a ‘death cross,’ which happens when the short-term 50-day moving average crosses below the long-term 200-day line—a typical sign that indicates bears are taking over. Not only this, but chart patterns suggest its price could head lower still.
Security problems are now an even bigger headache for Solana. Its reputation has been hit by more than one hack or scam:
- There have been links between North Korea’s Lazarus Group and the $1.5 billion Bybit hack.
- Investigators found that wallets involved in the Bybit hack were also used for Solana-based scams like the Pump.fun rug pull.
- Previous incidents, like the $107 million Libra token scam, have further damaged trust in the Solana ecosystem.
With so many security problems, investors are becoming more cautious, leading to lower capital inflows and weaker demand for SOL.
Solana isn’t the only one facing trouble. The entire market is experiencing a downturn. Bitcoin (BTC) has dropped 9% and is now trading at $87,165, while Ethereum (ETH) is down 12% at $2,362 and XRP has fallen 15%, now priced at $2.08.
In a broader market downturn, altcoins like Solana tend to see the most losses on the downside because of their high volatility.
Owing to all such negative factors, Solana’s short-term future is still uncertain. If selling pressure persists, SOL could easily drop a further 30% to about $110. However, if it can regain support at $170, it might have a chance to recover toward $215.
For now, all eyes are on the March 1 token unlock event, which could play a key role in deciding Solana’s next big move.
