Solana’s ecosystem is facing challenges as network activity falls and a major token unlock looms ahead. The price of SOL is expected to drop below the $180 support zone, reflecting the recent bearish sentiment in the market. The altcoin has already seen a significant 32% drop in price from $256 to $173 in just under a month, indicating further potential downside for one of the top cryptocurrencies in the market.
FTX’s bankruptcy estate is set to unlock 11.2 million SOL on 1 March, valued at $1.4 billion, as part of the asset liquidation plan following the exchange’s collapse in November 2022. This unlock could lead to increased volatility and further price drops for Solana. Additionally, controversy surrounding Solana’s ecosystem, such as the launch and subsequent rug pull of the LIBRA memecoin promoted by Argentine President Javier Milei, has negatively impacted demand and network activity.
The controversy surrounding the memecoin launch and the resignation of the CEO of Meteora due to the scandal has contributed to a decrease in Solana’s network activity. Active addresses have dropped significantly, reaching levels not seen since October 2024, indicating a decline in trading volume within the ecosystem. Total transaction fees have also fallen to late December levels, suggesting decreased trading activity. Despite these challenges, Solana remains a strong long-term performer with daily revenues nearly ten times that of Ethereum, although its total value locked lags behind.
The bearish price action of SOL is evident as the $180 support level has been breached and the price is below the $175 Fibonacci retracement level, signaling a possible bounce towards $180-$190. However, the bearish momentum indicates a potential drop towards $157 and beyond in the days ahead. With the current market conditions and uncertainties surrounding Solana’s ecosystem, investors should be cautious and monitor the situation closely for any developments that may impact the price of SOL.
