The price of Solana has seen a significant decline over the past two days, heavily impacting its meme coin ecosystem amid a broader crypto market sell-off.
On Saturday, Solana (SOL) plummeted to $127, marking a 15% decrease from its peak earlier this week and reaching its lowest value since March 2021.
This downturn coincided with substantial losses for various Solana meme coins, which lost most of their gains from earlier this week. Fartcoin (FARTCOIN) experienced a 15% drop on Saturday, while notable tokens such as Popcat (POPCAT), ai16z (AI16Z), and Bonk (BONK) fell by more than 10% each.
The market capitalization of all Solana meme coins dropped by over 10% to $7.2 billion, reflecting a staggering loss of more than $18 billion in value in just a few days.
Recent trading activity indicated that investors had previously capitalized on the Solana meme coin rally.
Data from DeFi Llama revealed that the trading volume on Solana’s decentralized exchanges surged by 60% in the past week, exceeding $3 billion. This activity surpassed that of Ethereum (ETH) and Binance Smart Chain (BSC), which recorded $11.35 billion and $8.9 billion in volume, respectively. It marked the first time in weeks that Solana’s DEX protocols outperformed its competitors.
The majority of Solana’s DEX volume stemmed from Pump, which facilitated over $2.8 billion in transactions, eclipsing the activity of other prominent DEXs like Orca, Meteora, Raydium, and Lifinity.
Solana also received positive news this week, highlighted by the expansion of Blackrock’s BUIDL, its money market fund, onto the network. This move is significant as BUIDL’s assets have surged to over $1.86 billion.
Solana Price Technical Analysis
Recent technical analysis indicates that Solana has endured a downward trend over the past few months, sliding from its January peak of $295.45 to $126. The formation of a bearish flag pattern, characterized by a steep vertical drop followed by a rectangular consolidation, is evident.
Additionally, on March 4, Solana exhibited a death cross pattern as its 50-day and 200-day moving averages reversed positions while trending downward.
Given the combination of the death cross and the bearish flag pattern, analysts suggest a potential further decline to $100. A plunge below the critical support level of $120, which has held since April of last year, would be necessary for this downward movement to materialize.
