Solana has experienced a significant decline of over 50% from its all-time high of $295 in January, largely influenced by reduced meme coin trading activity.
In the wake of the FTX fallout, Solana (SOL) has suffered its steepest monthly loss since November 2022, plummeting 38% over the past month. A drop in memecoin trading, which once drove substantial on-chain volume for Solana, has played a critical role in this downturn.
As of February 26, approximately 8.1 million tokens have been minted on a popular Solana-based memecoin trading platform, generating $577 million in fees. However, the trading momentum has significantly declined, with daily trading volume reaching a peak of $218 million on February 12 before fading.
Recent data indicates a staggering 94% drop in trading volume from February 25 to February 26, falling from $89.5 million to just $5.03 million. Most tokens have seen declines of 80–90% from their peak values, signifying a downturn in the broader memecoin market.
Solana’s decentralized finance (DeFi) landscape is experiencing notable outflows amid this turmoil. According to reports, Solana’s total value locked (TVL) has decreased from $12 billion in mid-January to $7.13 billion, reflecting a loss of $5 billion in under a month.
In the last 30 days, Raydium, the decentralized exchange that supports the memecoins emerging from Pump.fun, has also witnessed a 50% drop in TVL. Additionally, capital is shifting to alternative networks as Solana’s on-chain activity diminishes, with over $500 million bridged to Ethereum, Arbitrum, and other networks lately.
SOL is currently priced at $142, marking a 15% decline over the past week. Bullish traders are grappling to secure a support level, with the $140 threshold being critical. Failure to maintain above this point could see SOL fall to the $125 to $130 range, potentially hitting its lowest price since August 2024.
For SOL to regain its bullish trajectory, it must aim to breach the $150 mark while also recovering TVL and on-chain volumes. Without these factors, further declines remain likely, increasing market uncertainty.
A looming 11.2 million token unlock scheduled for March 1 could add additional pressure on SOL. Furthermore, the prospects of a Solana ETF approval appear slim at present, diminishing the potential for an immediate institutional market trigger.
