Solana price has crashed to a crucial support level and is at risk of further declines after forming a death cross pattern.
Solana (SOL), one of the top cryptocurrencies, has plunged to $138, down by 53% from its highest level this year.
This crash has coincided with the ongoing woes in its ecosystem as most meme coins have plunged. CoinGecko data shows that the market cap of all Solana meme coins has crashed from over $25 billion in January to $7.6 billion.
Official Trump (TRUMP), the biggest Solana meme coin, has dropped by 10% in the last seven days, giving it a market cap of $2.4 billion.
Other meme coins like Bonk, Dogwifhat, Pudgy Penguins, and Fartcoin have all slipped by over 20% in the last seven days. Notably, only the Official Trump meme coin has a market cap of over $1 billion.
Solana meme coins have become toxic assets after some high-profile blow-ups in the past few weeks. The most prominent one was Libra, which got to a market cap of over $4 billion after being promoted by Javier Milei and then crashed.
Solana price has not been boosted by the prospects of being included in President Donald Trump’s crypto stockpile. A Polymarket poll with $301,000 in assets shows that odds of a Strategic Solana Reserve have dropped to just 25% from over 40% earlier this month.
On the positive side, there are rising odds that the Securities and Exchange Commission will approve a spot SOL ETF later this year. These odds have jumped to 86% on Polymarket.
Further declines?
The daily chart shows that the SOL price has been in a steep downward trend in the past few months. It has plunged from near $300 to $140 today.
SOL crashed below the ascending trendline that connects the lowest swings since August last year. It also moved below the key support level at $170, the lowest swing on Jan. 13, and the neckline of the double-top pattern.
It has also formed a death cross pattern as the 50-day and 200-day moving averages have flipped each other.
Therefore, the coin will likely continue falling, with the next target level being the psychological point at $100.
Why Solana?
Solana was launched in 2020 by Anatoly Yakovenko, a former Qualcomm engineer, along with co-founders Greg Fitzgerald and Raj Gokal. Its blockchain was designed to offer high throughput, low transaction costs, and fast processing speeds using a unique consensus mechanism called Proof of History (PoH) combined with Proof of Stake (PoS).
So far, it has attracted a large community of developers, which fosters an environment ripe for experimentation, including the creation of meme coins.
Meme coins thrive on its blockchain for a few key reasons:
- Low Transaction Fees: This makes it affordable for developers to launch tokens and for users to trade them frequently, which is ideal for the speculative and often high-volume trading nature of meme coins.
- High Speed: It can process thousands of transactions per second, which ensures liquidity and minimizes slippage during trading, attracting meme coin enthusiasts who often chase rapid gains.
- Developer-Friendly Tools: It offers a robust development environment with tools like the Solana Program Library (SPL) and strong support for the Rust programming language. This ease of deployment encourages quick launches of meme coins, often with minimal effort.
These factors combined make Solana a popular choice for launching meme coins, despite the risks of volatility and scams in the space.
