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Solana’s price has plummeted by a staggering 10% today, dropping to $162. As the cryptocurrency continues to decline, several factors have contributed to its drastic fall. Here are four key reasons why Solana’s price is falling today.
Firstly, Solana is associated with high-profile rug-pull scams, leading to a significant loss of trust among investors. Reports have emerged linking a Solana wallet to multiple fraudulent projects, including Libra (LIBRA) and Melania (MELANIA), both with ties to political figures. These projects generated massive profits through manipulative tactics before disappearing, leaving investors at a loss. As a result, people are gradually losing faith in Solana.
Secondly, the network has experienced a sharp decline in its on-chain activity. The number of users on the Solana network has dropped from 18.5 million in November to 8.4 million, a whopping 55% fall. Additionally, total money moved on Solana has plummeted from $2 billion to $26 million. With fewer people using it, Solana’s price is naturally struggling.
Thirdly, investors are bracing for an increase in supply of SOL tokens. It is projected that over 15 million SOL tokens, worth more than $7 billion, will be unlocked between February and April. This surge in circulating supply could create additional selling pressure, further weakening Solana’s price. Market analysts have cautioned investors to exercise caution as the unlocking event may bring increased volatility.
Lastly, Solana has been struggling to keep pace with major cryptocurrencies like Bitcoin and Ethereum. Since early February, the SOL/ETH trading pair has plummeted by 28%, indicating that Ethereum is gaining strength over Solana. Furthermore, data from LookOnChain reveals that $772 million worth of stablecoins have exited the Solana ecosystem within a week, signaling reduced trust among investors.
In conclusion, it appears that these four key factors are contributing to Solana’s drastic price drop today.
Source: coinpedia.org
