This week, the world of cryptocurrencies is riding a storm, and Solana (SOL) is certainly bearing the brunt of it. With the buzz around memecoins dying down, we’ve seen prices tumble to depths they haven’t touched in months.
The downturn follows the massive hack at the ByBit exchange and the stir caused by President Trump’s new tariff proposals. Overall, the crypto market’s been hit, with Bitcoin sliding by 12% over the past week. Solana’s situation is even more stark—it’s taken a 22% dive, marking its lowest point in five months.
Recent data paints a bleak picture for Solana, as reported by Fortune. The drop in Solana’s value is linked to its ties with the latest scandal involving celebrity-endorsed memecoins, notably the LIBRA debacle. This memecoin soared to almost $5 billion before its rapid downfall, a crash exacerbated by promotions from Argentine President Javier Milei. His involvement has not only sparked public outrage but also triggered an investigation.
As noted by Zach Pandl, who heads research at the crypto asset management firm Grayscale, this incident highlights the inherent volatility and risks tied to memecoins. Pandl remarked, “The current phase of memecoin trading on Solana is over.”
Solana’s appeal in the memecoin development arena was largely due to its low-cost, fast transactions, and accessible infrastructure. Platforms like Pump.fun made it easy to whip up new cryptocurrencies on Solana, peaking at more than 71,000 memecoins created in a single day. However, Dune data now shows this number has dropped sharply to 26,000.
On the analytical front, warnings are surfacing about Solana possibly dipping below the $100 mark. Even though many memecoins are practically worthless and often tainted by scams, Pandl pointed out that the memecoin craze wasn’t entirely fruitless for Solana’s ecosystem. “It brought in users, generated revenue, and served as a stress test for the Solana blockchain in multiple ways,” he said. “In some respects, memecoin trading has been part of the genesis for building the next wave of financial infrastructure.”
Adding to the challenges, Solana’s futures market has seen its open interest plummet by 44% in the last month, dropping from a peak of $6.39 billion to just $3.57 billion. This decline suggests a waning confidence among investors who are less keen on holding leveraged positions in Solana.
Investor sentiment isn’t any brighter, as CoinGecko reports show. Trading volume has nosedived by 54% over the last two days, now accounting for a mere fraction of Solana’s $66 billion market capitalization.
Currently on the market at $134, this price is being watched closely as a significant support threshold amidst the ongoing slide. According to Crypto General, should this level break, Solana could fall below $100, marking a steep decline of more than 65% from its peak value.
The daily chart offers a clear view of SOL’s price downturn, providing a technical snapshot of the challenges at hand.
The images and charts featured here offer additional insights, with data sourced from DALL-E and TradingView.com.
