- Solana (SOL) has dropped to its lowest price since October, trading below $153
- The decline follows the Libra token scandal involving Argentine President Javier Milei
- Cooling meme coin sentiment is affecting SOL despite multiple asset managers applying for Solana ETFs
- Binance is reportedly selling SOL heavily, with $2 billion worth set to be unlocked
- Technical indicators show bearish signals with SOL breaking crucial support at $158
Solana (SOL) has fallen to its lowest price since mid-October. The token is now trading below $153, marking a steep 9% drop in the past 24 hours and a 25% decline over the past two weeks, according to data from CoinGecko.
The price drop comes as the cryptocurrency faces multiple challenges, including its connection to the Libra token scandal and decreasing interest in meme coins that had previously boosted the Solana network.
The Libra token, which was built on the Solana blockchain, lost about 90% of its value in just hours earlier this month. This collapse sparked fraud accusations and calls for the impeachment of Argentine President Javier Milei, who had promoted the token on social media platform X. The token was supposedly designed to help small businesses in Argentina.
SOL Price
President Milei later deleted his post about Libra and denied knowing about the coin’s creation. He claimed he thought it was a company looking to finance private ventures. The fallout from this scandal has now spread to affect Solana’s price.
At the same time, the once-hot meme coin market has cooled down. Earlier this year, meme coins like those related to Donald Trump saw huge interest, but that excitement has faded. While there was some weekend buzz about rapper Kanye West possibly launching his own coin, the overall hype has decreased.
Ethereum Outperforming
Mark Connors, chief investment officer at New York-based Bitcoin investment advisory Risk Dimensions, told Decrypt that token launchpad Pump.fun could no “longer carry the day for the faster blockchain, leaving investors favoring integrity over potential profit as market uncertainty sets in.”
Connors also noted that “the fallout from the Libra launch and confusion on who owns Kanye’s online [name, image, and likeness rights] accelerated a reversal in sentiment for the meme-based L1.” He added that Ethereum has outperformed Solana recently, dropping 18% compared to Solana’s 38% decline.
Technical Analysis
Technical analysis shows more trouble ahead for Solana. The token has broken down a crucial support level at $158 after a brief period of consolidation. The Gaussian channel has turned bearish while the price has dropped heavily below the channel. This suggests the token needs a major recovery to return to a bullish trend.
The Chaikin Money Flow (CMF), an indicator that measures buying and selling pressure, has dropped below zero after staying at average levels since December. This points to increasing bearish strength that could push the price toward the local support zone below $140.
Reports suggest that Binance, one of the largest cryptocurrency exchanges, has been selling SOL heavily. This selling pressure comes at a time when $2 billion worth of SOL is about to be unlocked, which could flood the market with more tokens.
Adding to these concerns, Wintermute, a leading liquidity provider, has reportedly withdrawn $38 million worth of SOL from Binance in the last few hours. Some market watchers believe this could be preparation for selling the token at higher prices, creating even more selling pressure and possibly leading to panic selling.
If Solana fails to hold the $150 price level, experts expect the bearish action to push the price down to the support zone between $138 and $139.
Solana ETFs?
Despite these challenges, there’s still some positive news for Solana. Multiple major asset managers have applied for exchange-traded funds (ETFs) based on the spot price of Solana. Franklin Templeton recently joined Grayscale, Bitwise, Canary, 21Shares, and VanEck in seeking approval from the Securities and Exchange Commission (SEC) for Solana-based funds.
Bloomberg Senior Analyst Eric Balchunas has estimated a 70% probability that the SEC will approve these ETFs. Such approval could potentially bring new institutional investment to Solana.
The overall activity on the Solana network has also declined. Several on-chain metrics show decreased usage, along with declining decentralized exchange (DEX) activity for the fifth consecutive week. This drop in network usage may be both a cause and effect of the falling price.
