Solana Plunges 20% to Five-Month Low as Transfer Volume Collapses 99% from $1.99B to $14.5M
Solana (SOL) is experiencing significant selling pressure, plummeting to a five-month low amid a broader market downturn, with a steeper decline than most major cryptocurrencies. While Bitcoin BTC/USD has dropped 12% over the past week, Solana SOL/USD has tumbled over 20% in a week, hitting its lowest price point since September 2024.
Solana Memecoin Cools Following $LIBRA Scandal
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Solana’s price dropped sharply can be mostly ascribed to the cooling of the memecoin fever that formerly generated notable blockchain activity. The recent $ LIBRA incident, a cryptocurrency that soared to a roughly $5 billion market capitalization before falling following Argentine president Javier Milei’s promotion, interferes with this slow down. The episode has set off an inquiry into Milei’s participation and most certainly determented other political leaders from starting such tokens.
“The $ LIBRA incident punctuated a period of very high activity among Solana memecoins that probably will discourage other political leaders from launching memcoeins for now,” said Zach Pandl, head of research at crypto asset manager Grayscale. Pandl said “the current phase of memecoin trading on Solana is over,” even while he thinks memcoins are here to stay in the crypto world.
Peak Solana-based memecoin creation platform Pump.fun debuted nearly 71,000 memecoins in one day. Reflecting declining interest, analytics company Dune reports the number has already dropped to only 26,000 as of Tuesday.
Solana’s On-Chain Activity Collapses as Network Usage Plummets
The sharp drop in network activity is maybe most concerning for Solana investors. Data provided by crypto expert Ali Martinez shows a startling 99% drop in Solana’s transfer volume from $1.99 billion in November 2024 to barely $14.57 million now.
This sharp drop in transfer volume points to a significant reduction in network usage and trade activity, therefore supporting worries about declining interest in the Solana ecosystem following the conclusion of the memecoin boom.
SOL Futures ETFs and Enhanced Compliance Support
Solana’s institutional infrastructure keeps developing even with the price drop. The first Solana futures ETFs from Volatility Shares – the Volatility Shares 2x Solana ETF (SOLT) and the Volatility Shares Solana ETF (SOLZ) have been listed by the Depository Trust & Clearing Corporation (DTCC).
Seen as a significant step towards possible future approval of spot Solana ETFs, this follows the debut of CFTC-regulated Solana futures contracts earlier this month by Coinbase Derivatives LLC. The SEC has verified receiving several filings for VanEck, Bitwise, Canary, and 21Shares’ spot Solana ETFs.
Blockchain analytics company Chainalysis also revealed it has become the first in its sector to automatically support all fungible tokens on Solana across its products, including SPL tokens and the token 2022 standard — representing almost 10 million Solana tokens.
Pump.fun X Account Hack Adds to Negative Sentiment
Complicating Solana’s already difficult situation, the Solana-based meme token launchpad Pump.fun recently had a brief X (previously Twitter) account hack. The hackers sought to fool buyers of a fictitious Pump.fun governance token. Blockchain researcher ZachXBT claims that this assault related to the hacks of the Jupiter DAO and DogWifCoin X accounts.
Although Pump.fun rapidly recovered control of its account, the incident draws attention to continuous security issues in the larger crypto ecosystem, hence fueling investor uncertainty.
SOL/USD Technical Analysis: Death Cross Looms Near Critical Support
Solana presents more technical difficulties as well. With the 50-day and 200-day exponential moving averages almost matching a “death cross,” a pattern usually linked with additional negative for cryptocurrencies, two main indicators on SOL’s daily chart are approaching a bearish crossover.
Considered the “golden zone,” the asset is presently trading between the 0.5 and 0.618 Fibonacci retracing levels. With $130 as a crucial support that was held during the six-month consolidation phase in 2024. Should this level fall short, analysts propose possible retests of the $110–120 liquidity pocket.
The first perhaps encouraging indication is that, for the first time since June 2023, the Relative Strength Index (RSI) has fallen below thirty. The RSI was quite oversold on the past two times, signaling a bottom and perhaps a temporary bounce or reversal.
Solana Outlook: Potential for Mean Reversion After 55% Correction
Some analysts see possible mean reversion even with the pessimistic attitude of today. From its all-time peak in January 2025, Solana has fallen nearly 55%; market mood has slumped; crypto analyst Miles Deutscher notes Solana is experiencing its “capitulation moment” with sentiment at a one-year low.
Most investors are currently negative on key crypto assets, including Bitcoin, Ethereum, XRP, and Solana, according to data analytics platform Santiment. Together with the notable price drop, this general pessimism could restrict the possibility for more extreme declines and maybe create conditions for a comeback should support levels hold.
The next days will be crucial as Solana gets closer to the required $130 support level. If bulls can defend this zone, SOL may consolidate over the next weeks between $130 and $150 with a mean reversion rally likely. A daily closing below $130, however, might allow more falls toward the $110 to $120 range.
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