Solana’s price remains in a bear market after falling over 33% from its year-to-date high, with technical indicators pointing to a deeper decline.
Solana (SOL) token crashed to $184 on Monday and is hovering near its lowest level since February 2nd.
This downturn coincides with stalled network growth and concerns about rug pulls within its meme coin ecosystem. CoinGecko data shows that the market cap of all Solana meme coins has crashed from over $25 billion in January to $11.5 billion today.
Most Solana meme coins have dropped by double digits from their all-time highs. Official Trump (TRUMP) has plunged from $103 in January to $18 today. Similarly, tokens like Fartcoin, ai16z, Gigachad, and Popcat have all declined by over 15% in the past seven days.
A common trend in the Solana ecosystem involves developers launching meme coins, artificially inflating their value, exiting, and leaving many traders with losses. For example, Donald Trump’s insiders profited as the TRUMP token surged, with many cashing out before the collapse. As a result, concerns are growing about the long-term viability of the meme coin ecosystem.
This trend has affected the volume traded in Solana’s decentralized exchange protocols like Raydium, Orca, and Jupiter has retreated. The total volume dropped by almost 25% in the last seven days to $26.21 billion. It has been overtaken by BNB Chain, which handled almost $30 billion in that time.
Another sign of a slowdown in the Solana network is the decline in stablecoin activity. The total stablecoin supply on Solana fell by $772 million in the past seven days, while Ethereum’s increased by $1.1 billion over the same period. This is significant, as stablecoins are the primary medium of exchange in the blockchain industry.
Further data shows that fees generated within the Solana ecosystem have plunged in recent weeks. Daily fees fell from a peak of $31 million in January to just $2 million on Monday.
Solana price technical analysis
The daily chart shows that SOL’s price has declined after reaching a high of $300 in January. It has now dropped to a crucial support level, struggling to move below the ascending trendline that has connected its lowest swings since August 2023.
Solana is nearing a death cross pattern, with the 50-day and 200-day weighted moving averages on the verge of a bearish crossover. It is also approaching $170, the neckline of a double-top pattern formed at $265.
If SOL falls below $170, there is a risk of a bearish breakdown to $110, representing a 40% decline from current levels.