Solana price has dropped to a crucial support level as momentum in its ecosystem fades following the recent meme coin pump-and-dump cycles.
Solana (SOL) price was trading at $200 on Friday, down by 32% from its highest level in 2024, a sign that it is in a bear market.
The recent decline occurred as third-party data shows that network growth has lost momentum over the past few months. Most meme coins in its ecosystem have crashed, bringing their total market cap from $25 billion in January to $12 billion.
One of Solana’s key challenges is its association with viral meme coins that initially surge before plunging. For example, the Official Trump (TRUMP) meme coin has crashed from $75 to $20, while Melania (MELANIA) has moved from $12 to $1.5.
A recurring pattern, as the New York Times wrote recently reported, has been the launch of new meme coins that experience rapid gains before crashing. Insiders often sell at the peak, leaving many retail traders holding the bag.
These pump-and-dump cycles have led to a sharp decline in Solana’s decentralized exchange trading volume. Data from DeFi Llama shows that volume across its protocols has dropped 30% in the last seven days to $28.5 billion. Solana has now been overtaken by Binance Smart Chain, which handled $27 billion in volume.
Solana’s sales in the non-fungible token industry has also dropped. Its total NFT sales in the last seven days dropped by 32% to $11 million.
This slowdown has resulted in lower network fees. Data compiled by TokenTerminal shows that daily fees dropped to $3.48 million on Thursday, down from a peak of $31 million on Jan. 19.
Solana price technical analysis
The daily chart shows that SOL’s price has been consolidating over the past few days at a crucial support level. It remains slightly above the 200-day Exponential Moving Average and the ascending trendline that has connected the lowest swings since August last year. Historically, Solana has rebounded after testing these levels.
Solana price is also nearing the support at $170, the lowest swing in January, and the neckline of the double-top pattern at $265.
A drop below these support levels would favor the bears and signal further downside. Such a move could increase the likelihood of a decline to $110, the lowest swing from July last year.
The alternative scenario is a rebound, potentially pushing Solana toward the key resistance level of $250.
