Since hitting its all-time high of $295 on January 19, Solana’s price has declined by 50%. Now, it is trading at $144.11, indicating that it has already experienced a dip of around 50%. On Tuesday, Solana’s native token SOL hit a four-month low of $132. Officials and market analysts expect that this notable decline is due to the result of several factors, including the upcoming March 1st token unlock, its involvement in a scandal involving the Libra meme coin, liquidity migration, etc.
Solana Price has Plunged 50% from its All-Time High, What’s Next for SOL?
Cryptocurrencies showed a significant price enhancement and growth when Donald Trump was officially elected as the United States president. Solana also showed significant price growth in those days, but now is not an ideal time for Solana and the SOL holders. According to the latest news, Solana has dropped to $144 which is half of its all-time high achieved in the previous month. Solana’s price plummeted to $132 on Tuesday, which is its lowest point since October. Even though the price has shown a decent recovery and is trading in the $142-144 range, it is still a setback for the Solana network. The experts and analysts expect and believe that Solana will eventually recover from this condition and potentially reach a new all-time high above $1000 at the end of 2025.
Solana managed to surpass its record-high $10 billion total value locked (TVL) in the previous month and has been experiencing a decline since reaching the apex position. Solana experienced a drop of $4.87 billion in its TVL. SOL reached $12 billion in January and recently dropped to $7.13 billion. According to the latest market insights, the notable decrease in the SOL’s TVL is led by Raydium with a significant 60% drop within a month. The major decentralized applications like Jito liquid staking, Jupiter DEX, and Kamino Lending reported a TVL decline of 46%,25%, and 33% respectively.
Why has Solana been Down Recently?
The price of Solana has been the hot topic of the crypto landscape, the token experienced a major plunge since reaching its all-time high in January, at the moment the price of SOL is not recovering fast and various analysts and experts studying the scenario, and the verge of finding the actual reason behind the price drop. The analysts have come up with multiple reasons why Solana lost its value in the crypto market.
Joe DiPasquale, the CEO of cryptocurrency hedge fund manager BitBull Capital, stated that Solana’s recent price drop below $150 could be attributed to several factors, including the upcoming token unlock on March 1st, which would release around 11.2 million SOL tokens and increase selling pressure.
Alex Lin, cofounder and general partner at venture capital firm Reforge, stated that a looming token unlock event of approximately 11 million SOL tokens, valued at $1-2 billion depending on the price of SOL, is scheduled for March 1, 2025. He added that this anticipated increase in supply, along with future unlocks in April and May (albeit smaller), might be prompting the market to sell preemptively, fearing dilution and downward pressure on SOL’s value.
The decline in the on-chain activity of Solana is a major factor causing Solana’s price struggle. When we analyze the last seven days’ on-chain activity of Solana, we can see that the volume of transactions on the decentralized exchanges on the Solana Network has reportedly experienced a 30% decrease and reached its lowest level since last October. Some experts believe that the unexpected decline of Solana might be due to the market news like Bitcoin ETFs have recorded the second week of net outflows worth $1 billion and the Bybit hack which resulted in the loss of more than $1.5 billion worth of ETH. However, some analysts claim that even before this market crash, Solana showed the struggle and several other controversies like the Libra scandal impacted the momentum. This scandal was the one that dragged Solana below $200 and is still one of the impactful reasons for this unprecedented price decline of SOL.
Can Solana Comeback From This Calamitous Market Crash?
According to the findings and opinions of the market experts, Solana will eventually track back and recover from this situation. They believe that Solana could reach a new all-time high of $1000 before the end of 2025. Solana had been in similar situations before, the price of SOL dropped to $6 when the FTX exchange collapsed, yet Solana managed that situation and came back stronger. Now with the pro-crypto attitude of Donald Trump, a crypto-friendly SEC, and potential ETF approval, the comeback of SOL is just a matter of time. The Ethereum killer will perform better in the market, once these issues are resolved and taken care of.
