Solana (SOL) Under Pressure: Will the Price Drop Another 40% or Rebound?

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Solana (SOL) has been navigating turbulent waters in recent weeks, as mounting selling pressure and broader market downturns weigh heavily on investor sentiment. Once celebrated for its high-speed blockchain and vibrant ecosystem, Solana now faces a critical juncture. With price declines nearing 50% from its 2024 peak and internal ecosystem challenges adding to the strain, many are asking: Is this a temporary dip or the start of a deeper correction?

Recent Price Action and Market Sentiment

Solana’s price dropped sharply from its 2024 high of $264, losing nearly 40% over the past month and an additional 15% in just one week. After hitting a four-month low of $134.69, SOL showed minor recovery, trading around $142.39 with a modest 1.5% gain over 24 hours. While this stabilization offers a glimmer of hope, overall market sentiment remains bearish.

According to on-chain analytics firm Glassnode, Solana investors have transitioned from a phase of optimism to one dominated by fear. This shift is evident in key metrics such as declining trading volume—down 18% to $13 billion—and reduced net unrealized profit margins. The data suggests that holders are increasingly hesitant, with many choosing to exit positions rather than wait for recovery.

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Why Is Solana’s Price Falling?

While the broader crypto market slump plays a role, several Solana-specific factors are amplifying the downward trend:

1. Memecoin Fraud and Loss of Trust

The rise of memecoins on Solana, particularly through platforms like Pump.fun, has led to a surge in fraudulent projects. One notable case—the LIBRA memecoin scam—eroded investor confidence. These schemes often involve rapid price pumps followed by immediate dumps, leaving retail investors with significant losses.

2. Collapse in Ecosystem Market Capitalization

Solana-based cryptocurrencies saw their combined market cap plummet from $25 billion in January to just $8.6 billion. This dramatic decline reflects weakening interest in Solana-native projects and reduced capital inflow into its DeFi and NFT sectors.

3. Declining Network Activity

Key on-chain indicators point to shrinking user engagement:

4. Upcoming Token Unlock Adds Selling Pressure

On March 1, approximately 11.2 million SOL tokens—part of the FTX estate distribution—are set to be unlocked. This influx could increase sell-side pressure, especially if early recipients choose to liquidate holdings amid current uncertainty.

Key Support and Resistance Levels

Technical analysts are closely monitoring Solana’s movement within a critical support zone between $120 and $140.

“The $120–140 range is crucial,” warns crypto analyst Ansem. “After a 50% drop in a month, shorting may not be ideal—but I remain broadly pessimistic on most crypto assets over higher timeframes.”

If SOL holds above $120, a rebound toward **$170—a key resistance level—remains possible. However, a breakdown below $120 could open the door to further downside, potentially testing the **$100 psychological support.

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What’s Next for Solana?

Despite current headwinds, Solana’s long-term potential shouldn’t be dismissed outright. The network still boasts:

However, recovery hinges on three core factors:

  1. Restoring investor confidence after high-profile scams.
  2. Revitalizing ecosystem activity through new use cases and incentives.
  3. Absorbing the impact of upcoming token unlocks without triggering panic selling.

Until these challenges are addressed, volatility is likely to persist.

Core Keywords

Frequently Asked Questions (FAQ)

Will Solana rebound in 2025?

While short-term outlooks are bearish, many analysts believe Solana can recover in 2025 if network usage rebounds and macroeconomic conditions improve. A hold above $120 would strengthen the case for a future rally.

What causes Solana’s price to drop?

Multiple factors contribute: broader market trends, declining on-chain activity, memecoin-related scams, falling ecosystem market caps, and upcoming token unlocks that increase supply.

Is it safe to buy SOL now?

Investing in SOL at current levels carries risk due to weak sentiment and technical weakness. Traders should use strict risk management and consider dollar-cost averaging instead of large lump-sum entries.

What is Solana’s next price target if it breaks $140?

A sustained breakout above $140 could lead to a retest of $170. Further momentum might push toward $200—but only if market conditions shift positively.

How does token unlocking affect SOL’s price?

The release of 11.2 million SOL tokens increases circulating supply. If recipients sell immediately, it can create downward pressure—especially in a weak market.

Can Solana survive another crypto winter?

Historically, Solana has survived previous bear markets. Its technical advantages and active development team suggest resilience—but survival depends on regaining user trust and ecosystem growth.

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Final Outlook: At a Crossroads

Solana stands at a pivotal moment. The confluence of macro pressures, internal setbacks, and looming token unlocks creates significant downside risks. Yet, its foundational strengths remain intact.

For investors, the path forward requires vigilance:

Whether Solana drops another 40% or stages a comeback depends not just on price action—but on its ability to rebuild trust, reignite innovation, and adapt to changing market dynamics.

The next few weeks will be decisive. For those watching closely, opportunity may lie ahead—but only for those prepared to navigate the volatility wisely.