Solana Crypto Stablecoin Market Cap Doubles in January

The total value of stablecoins on the Solana crypto blockchain more than doubled in Jan., jumping from $5.1 Billion to $11.4 Billion, according to DefiLlama data.

Solana's stablecoin market cap surged in January, driven by memecoin trading and increased USDC issuance.

Solana's crypto blockchain saw a massive influx of stablecoins in January, with the total value increasing by over 120%, from $5.1 billion to $11.4 billion, as per DefiLlama. This surge was primarily fueled by an increase in memecoin trading on Solana, which has continued to attract speculative traders due to its low fees and fast transactions.

Solana's stablecoin market is dominated by Circle's USDC, which accounts for nearly 80% of all stablecoins on the network, with a total value of $9.25 billion. Blockchain data from CCData also reveals that Circle has been ramping up USDC issuance, with an additional $250 million minted on February 3, bringing its weekly total to $1.25 billion.

Meanwhile, Tether (USDT) remains the world's most traded stablecoin with a $139.5 billion market cap, but its presence on Solana is limited compared to Ethereum and Tron. Notably, Circle's USDC has outpaced all stablecoins in 2024, recording a 78% annual growth rate.

As Tether faces regulatory challenges in the European Union due to Markets in Crypto-Assets (MiCA) regulations, Circle's USDC is expanding its presence on Solana, benefiting from increased stablecoin adoption on the network.

Despite Solana's stablecoin surge, SOL price faces pressure

The surging stablecoin presence on Solana has failed to uplift the native token, with SOL price showing a stark divergence from the network's stablecoin performance.

SOL price has dropped 33% from its all-time high of $293 set two weeks ago as the broader crypto market correction led to over $2 billion in forced liquidations. SOL fell 8.88% in the past month. At the time of writing, SOL trades at $196 after a 7% drop in the past 24 hours, with over $85 million in forced liquidations—mostly affecting long traders.

Crypto analyst Ali Martinez points out that if SOL fails to hold above $191, a drop to $138 could be on the cards.

On the other hand, SOL might rebound if it manages to stay above $191, as technical analysis shows a bullish continuation pattern forming since November. The recent downturn has brought the price to the 50-week moving average, which has been a major support level. If Solana holds above $191, it could see a recovery in the coming weeks. However, if selling pressure intensifies, SOL could slide toward $138, which might serve as the next major support zone.

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