Solana’s Price Struggles Amid Bear Market and Network Growth Concerns

Solana’s price continues to struggle, with a decline of over 33% from its year-to-date high. The bear market has seen the Solana token crash to $184, with technical indicators pointing to a deeper decline. This downturn coincides with stalled network growth and concerns about rug pulls within its meme coin ecosystem.

Market Cap of Solana Meme Coins Plunges

According to CoinGecko data, the market cap of all Solana meme coins has crashed from over $25 billion in January to $11.5 billion today. Most Solana meme coins have dropped by double digits from their all-time highs. For example:

  • Official Trump has plunged from $103 in January to $18 today.
  • Tokens like Fartcoin, ai16z, Gigachad, and Popcat have all declined by over 15% in the past seven days.

Rug Pulls and Concerns About Long-Term Viability

A common trend in the Solana ecosystem involves developers launching meme coins, artificially inflating their value, exiting, and leaving many traders with losses. This trend has affected the volume traded in Solana’s decentralized exchange protocols like Raydium, Orca, and Jupiter. The total volume dropped by almost 25% in the last seven days to $26.21 billion.

Decline in Stablecoin Activity and Fees

Another sign of a slowdown in the Solana network is the decline in stablecoin activity. The total stablecoin supply on Solana fell by $772 million in the past seven days, while Ethereum’s increased by $1.1 billion over the same period. Fees generated within the Solana ecosystem have also plunged in recent weeks, with daily fees falling from a peak of $31 million in January to just $2 million.

Solana Price Technical Analysis

The daily chart shows that SOL’s price has declined after reaching a high of $300 in January. It has now dropped to a crucial support level, struggling to move below the ascending trendline that has connected its lowest swings since August 2023. Solana is nearing a death cross pattern, with the 50-day and 200-day weighted moving averages on the verge of a bearish crossover.

If SOL falls below $170, there is a risk of a bearish breakdown to $110, representing a 40% decline from current levels. Traders and investors should keep a close eye on these technical indicators and be prepared for potential price movements.

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