Key Takeaways:
- Price Decline: Solana (SOL) has dropped 8.37%, currently trading at $170.69.
- Network Activity Decline: Active addresses have plummeted by 55%, signaling reduced engagement.
- Token Unlock Event: 9.75 million SOL tokens are set for release on March 1, 2025, potentially increasing volatility.
- Meme Coin Incident: The LIBRA pump-and-dump event has further shaken investor confidence.
Solana’s Recent Price Decline: What’s Behind the Drop?
As of February 18, 2025, Solana (SOL) has seen a sharp market decline, with its price falling 8.37% to $170.69. This drop follows a week-long downtrend, marking a 17.28% decrease over the past seven days and a staggering 36.67% loss for the month. Despite these short-term setbacks, SOL maintains a 52.14% gain over the past year.
1. Network Activity Sees Significant Decline
A primary factor contributing to Solana’s downward movement is the drastic reduction in network activity. Active addresses on the Solana blockchain have decreased from 18.5 million in November 2024 to just 8.4 million today—representing a 55% decline. This drop suggests waning user engagement, which often correlates with lower transaction volumes and decreased investor confidence.
2. Impact of LIBRA Meme Coin Incident
Solana’s ecosystem was recently rocked by the LIBRA meme coin pump-and-dump event. This incident not only affected the specific token but also triggered broader negative sentiment across Solana-based meme coins. Meme coins have been a significant driver of retail participation in Solana’s network, and this event’s fallout has led to increased caution among traders.
3. Upcoming Token Unlock Raises Concerns
Adding to the bearish sentiment is the upcoming release of 9.75 million SOL tokens by the FTX estate, scheduled for March 1, 2025. This unlock represents the largest single release of SOL tokens to date and could significantly increase selling pressure if these tokens hit the open market.
Technical Analysis: Support and Resistance Levels
From a technical perspective, SOL’s next critical support level is near $165. If selling pressure continues, the token might test the $150 level. On the upside, resistance sits at approximately $185. Breaking above this level would signal renewed bullish momentum.
Market Outlook: What’s Next for Solana?
Solana’s upcoming token unlock, combined with reduced network activity and shaken investor confidence, presents a challenging short-term outlook. However, its strong fundamentals and continued development in DeFi and NFTs could support long-term growth.