TL;DR
- Solana has dropped nearly 38% since January, affected by memecoin speculation and a decline in trading volume.
- The collapse of the LIBRA token and market manipulation have weakened confidence in the network, with insider traders extracting over $200 million.
- On March 1, 11.2 million SOL will be unlocked, potentially increasing selling pressure and driving greater market volatility.
Solana (SOL) is going through a difficult period after falling nearly 38% since January. Factors such as memecoin speculation, declining trading volume, and the imminent release of millions of tokens have created significant uncertainty in the market.
Currently, SOL is just above $167, with a daily drop of 9.2%. On a weekly scale, losses deepen, reaching a 16% decline. There are no clear signs of short-term recovery.
The impact of memecoins has been one of the biggest issues for the network. The collapse of the LIBRA token, which reached a market capitalization of $4.56 billion before plunging 94%, has further weakened trust in the ecosystem.
Solana Memecoins Under Scrutiny
This situation has led to stricter scrutiny of these highly volatile assets, especially after revelations that many operate under market manipulation schemes. Analysts report that insider traders have extracted over $200 million in profits at the expense of retail investors, fueling discontent and skepticism.
Trading volume on decentralized exchanges within the Solana network has also shown a downward trend. Over the past seven days, activity in these markets has dropped by 20.57%. Platforms like Raydium and Orca recorded declines of 46.99% and 12.52%, respectively, suggesting that users are either migrating to other options or reducing their exposure to Solana. Despite this trend, some projects like Meteora have managed to increase their activity, indicating a shift in user preferences within the ecosystem.
Imminent Sell-Off?
A key event that could impact Solana’s immediate future is the release of 11.2 million tokens on March 1. Investment funds like Galaxy, Pantera, and Figure will sell these assets as part of FTX’s liquidation, potentially adding further downward pressure on the price. This situation has fueled speculation about large-scale sell-offs, which could significantly increase market volatility
