Solana (SOL) has hit a tough roadblock, currently down nearly 17% from its monthly highs above $220, trading below the $200 mark. Despite showing strong bullish momentum earlier, SOL has faced multiple failed attempts to break through key resistance levels. Now, fears are rising that the price could slip below important multi-month support levels, creating uncertainty about its next move.
One of the main factors contributing to Solana’s downturn is growing controversy within its ecosystem, particularly involving scams linked to memecoins like LIBRA, Pumpfun, and Meteora. These developments have sparked widespread community concerns, and the backlash against memecoins has significantly impacted the Solana ecosystem. This negativity is affecting both the sentiment surrounding SOL and its overall market performance.
Key metrics reflect the severity of the situation. The total value locked (TVL) in the Solana ecosystem has dropped sharply from over $12 billion to $8.9 billion, while trading volume has plummeted from $35 billion to just $2.5 billion. Interestingly, the number of transactions continues to grow, suggesting that while individual trading activity remains steady, demand for the token itself is waning. Open interest (OI) has also taken a hit, falling from $6.5 billion to $4.1 billion, indicating a lack of confidence among traders.
From a technical perspective, the Solana price chart signals a bearish trend. SOL has broken down from a critical support level, suggesting a potential breakdown below the 200-day moving average at $183.47. The On-Balance Volume (OBV) is also on a downward trajectory, confirming a bearish divergence and further complicating the outlook. If the bulls fail to defend the support zone between $181.99 and $178.50, the SOL price could face a drop below $170, adding to the growing concern over its price action.
Also Read: Solana (SOL) Struggles at $205 Resistance – Key Levels and Market Outlook
As Solana battles to hold its ground, all eyes will be on how the community and traders respond in the coming days, particularly in light of the ongoing memecoin controversy.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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