Journalist
Posted:
- Solana struggled with a 40% price drop, driven by memecoin concerns and market uncertainty.
- The imminent unlock of 11.2 million SOL tokens could pressure Solana’s price further.
Solana [SOL] is facing significant headwinds, with a 40% drop in value since January, driven by concerns over the rise of memecoins and a recent rug pull involving the LIBRA token.
To compound these challenges, DEX trading volumes have sharply declined, while the upcoming unlock of 11.2 million SOL tokens on the 1st of March is expected to apply further pressure on the market.
As major investors prepare to liquidate their holdings, Solana’s future remains uncertain, leaving many to question its next move in an increasingly volatile environment.
SOL price and volume decline
Source: X
At the time of writing, Solana’s price was $169.03, marking a significant drop as part of a broader trend. SOL has fallen 40% since its peak in January and has dropped 10% within the past week.
This downward trajectory is coupled with a noticeable decline in trading volumes, signaling waning investor interest and confidence in the asset.
Memecoin impact: The LIBRA rug pull
The collapse of the LIBRA token has intensified Solana’s challenges. Initially promoted by Argentine President Javier Milei, LIBRA quickly reached a market capitalization of $4.56 billion.
However, the token’s value crashed by over 94% within hours, resulting in significant losses for investors.
This event has been widely regarded as a “rug pull,” where developers remove liquidity, leaving investors with worthless assets.
The scandal has sparked legal action against President Milei and increased scrutiny on memecoins and their impact on the crypto market.
Solana faces decreased activity as token unlock event looms
The Solana ecosystem is experiencing mounting pressure due to declining DEX trading volumes. At press time, Solana’s 24-hour DEX volume stood at $2.932 billion.
And the weekly total was $24.89 billion, reflecting a 20.57% drop over the past seven days.
Source: DeFiLlama
Leading platforms like Raydium and Orca have seen significant reductions in weekly activity, with drops of 46.99% and 12.52%, respectively.
In contrast, Meteora has recorded a 23.75% increase, suggesting a shift in user preferences within Solana’s DeFi landscape.
Looking ahead, a crucial event is set for the 1st of March, when major investors such as Galaxy, Pantera, and Figure will unlock 11.2 million SOL tokens, sold during FTX’s bankruptcy proceedings.
The release of these tokens raises concerns about potential sell-offs, which could apply additional downward pressure on SOL’s price.
