Solana Price Drop: Analysis & Implications
The Solana (SOL) price experienced a significant drop, falling nearly 5% and breaching the crucial $190 support level. This decline is attributed to several converging factors, painting a bearish short-term outlook for the cryptocurrency.
Factors Contributing to Solana's Price Decline
CoinMarketCap data reveals Solana's price vulnerability, with a potential fall below $180. Analyst Ali Martinez highlighted a 2.24% decrease in the number of wallets holding over 100 SOL in the past two weeks, dropping from 154,653 to 151,184. This suggests significant whale selling pressure.
Further contributing to the downturn is the recent offloading of 148,759 SOL (approximately $28 million) by the meme coin launchpad, Pump.fun. This, coupled with a 24% drop in decentralized exchange (DEX) volume on the Solana network, points to a capital shift towards other ecosystems, notably the Binance Smart Chain (BSC), which is experiencing a surge in meme coin activity (nearly 50% increase in DEX volume over the past week).
The Impact of the LIBRA Meme Coin Rug Pull
The collapse of the LIBRA meme coin, heavily promoted by Argentinian President Javier Milei, significantly impacted investor sentiment. This rug pull resulted in losses exceeding $286 million for 74,698 traders, while insiders reportedly cashed out over $100 million. This incident fueled fear, uncertainty, and doubt (FUD) within the Solana ecosystem, further contributing to the price decline.
🚨 $LIBRA wiped out traders. 74,698 traders lost $286M+ on the token promoted by Argentina’s President @JMilei. Total carnage. pic.twitter.com/8QByngPhGu
— The Solana Post (@thesolanapost) February 17, 2025
The LIBRA incident exposed vulnerabilities in Solana's meme coin ecosystem, leading to capital flight from the network.
Future Outlook and Potential Risks
The Solana price remains vulnerable. The unlocking of $2.06 billion worth of tokens in early March, originating from FTX's bankruptcy estate, could exert significant selling pressure. This warrants caution for investors.
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