The SOL token experienced a 50% price decline from its January peak value of $295 due to reduced memecoin trading. SOL has experienced its most significant monthly decline since the FTX collapse by falling 39% within the last 30 days.
The surge in Solana was heavily influenced by memecoins where Pump.fun alone created 8.1 million tokens while collecting $577 million in fees. The daily trading volume of Solana reached its peak at $218 million on Feb. 12.Â
The trading activity on Solana experienced a dramatic decrease of 94% during the period between Feb. 25 and Feb. 26 where trading volumes dropped from $89.5 million to $5.03 million. The market sentiment has weakened as most memecoins experienced losses of 80–90% from their peak values.
The DeFi sector on Solana shows clear signs of cooling down. The TVL on DefiLlama shows a $5 billion reduction since mid-January as the metric dropped from $12 billion to $7.31 billion.Â
Raydium the main decentralized exchange on Solana for memecoins experienced a 50% decrease in its total value locked (TVL). In the past 30 days, more than $500 million has been bridged to Ethereum, Arbitrum, and Sonic.
The SOL token currently trades at $142 after experiencing a 15% decrease in one week. SOL faces resistance at the $140 support zone as bulls fail to maintain their position which could trigger a price decline toward $125–$130. The price needs to surpass $150 to start building bullish momentum.
The upcoming March 1 SOL unlock of 11.2 million tokens joins other negative factors that pressure SOL’s price and reduce the likelihood of Solana ETF approval. The future of SOL depends on when confidence returns to the market.
Also Read: Solana Crash: Will SOL Drop to $100 Soon?
