Solana Price Drops to Crucial Support Level Amid Fading Ecosystem Momentum

Solana’s price has plummeted to a critical support level, sparking concerns about its ecosystem’s momentum. As of Friday, Solana’s price was trading at $200, marking a 32% decline from its highest level in 2024. This downturn has led analysts to label the cryptocurrency’s current state as a bear market.

Loss of Momentum and Meme Coin Crashes

Third-party data reveals that Solana’s network growth has lost steam over the past few months. The total market capitalization of meme coins in its ecosystem has dwindled from $25 billion in January to $12 billion. This decline is largely attributed to the crash of several meme coins, including Official Trump and Melania.

Insiders often sell at the peak, leaving many retail traders holding the bag.

This recurring pattern has 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.

Decline in NFT Sales and Network Fees

Solana’s sales in the non-fungible token industry have also experienced a significant drop. Its total NFT sales in the last seven days have plummeted by 32% to $11 million. This slowdown has resulted in lower network fees, with daily fees dropping to $3.48 million on Thursday, down from a peak of $31 million on January 19.

Technical Analysis: What’s Next for Solana’s Price?

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.

Key levels to watch include 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, potentially pushing Solana’s price to $110, the lowest swing from July last year.

Tips for investors:

  • Keep a close eye on Solana’s price movements and adjust your investment strategy accordingly.
  • Consider diversifying your portfolio to minimize risk.
  • Stay informed about market trends and analysis to make informed decisions.

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