Solana Crisis: SOL Price Drops by 9% Today – Can The Project Recover?
A recent Galaxy report revealed that LIBRA fallout has hurt the Solana ecosystem, but optimism remains for the project
Key Points
- Galaxy notes revealed that the memecoin narrative weakened following TRUMP launch.
- SOL’s downward price movement mirrors investors losing interest following recent events.
Some members of the crypto industry believe that Solana “is dead” following the latest memecoin market drama stemming from the LIBRA chaos. SOL’s downward price trajectory hints at the fact that investors might have lost interest in the project, at least for the moment.
SOL Downward Price Trajectory
At the moment of writing this article, SOL is trading above $169, down by around 9% in the past 24 hours.
SOL price in USD todayEarlier today, SOL price dropped to $164, but the coin managed to record a slight rebound to current levels. SOL currently has a market cap of almost $82.6 billion.
During the past seven days, SOL reached a top above $204 on February 14 but immediately began a downward trajectory.
Solana’s Downfall, Triggered by the LIBRA Scandal
A new report from Galaxy Research notes that a major cause for Solana’s downfall is the chaos around the coin LIBRA, a controversial crypto project that was launched last week on the Solana network.
LIBRA initially saw support from Arngetina’s President, Javier Milei, ahead of losing over $4.4 billion in market cap. The project was surrounded by criticism and even triggered a sharp drop in Argentina’s main stock index yesterday.
Galaxy Research noted that this apparent rug pull is the latest incident hurting Solana. According to them, the memecoin narrative had already begun to slow down following the launch of TRUMP memecoin by the US President back in January.
They noted that this triggered a “liquidity suck” last month which continued following the LIBRA launch.
LIBRA Hurt Solana and the Memecoin Sector
The chaotic LIBRA launch not only hurt the Solana ecosystem but also the entire memecoin sector. During the weekend, the Kobeissi Letter said that LIBRA was the biggest rug pull in history, wiping millions of dollars off the market.
A user on X noted that the Solana fall is worse than the FTX collapse, and the LIBRA and MELANIA coins changed everything.
The user Xremlin shared a thread via X, detailing the downfall of Solana which began with the launch of TRUMP and MELANIA memecoins last month, and culminated with the LIBRA scandal.
It’s also worth noting that the memecoin sector is down by almost 5% in the past 24 hours, according to data from CoinGecko .
SOL’s recent price drop mirrors the decreased investor interest in the project.
Solana Fundamentals Decline
According to data from DeFi Llama, the Solana TVL declined significantly since January when it topped over $12.1 billion.
DeFi Llama dataAlso, the Solana network recorded a significant decline in active addresses. Since the beginning of the year, Solana’s active addresses dropped significantly, according to data from Glassnode.
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Solana’s Relative Strength Index (RSI) another important indicator is also under pressure, pointing to continued weakness for Solana, as TradingView data shows.
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However, it’s important to note that before the January decline on Solana and in the memecoin sector began, Solana was surrounded by optimistic reports.
Solana’s Latest Achievements
On February 6, we revealed that Solana recorded a full year of continued uptime, while VanEck made some bullish price predictions about SOL.
It’s also worth noting that recently the SEC acknowledged Grayscale’s ETF for SOL, hinting at a potential approval later this year. This was an important move by the SEC under the current Trump administration, considering that before, under the Biden administration, SOL was accused of being a security.
Current price predictions claim that if SOL recovers above $183, the price of the coin could head back to $200 and investors could regain interest in the project.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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