Solana (SOL) Price Drops Nearly 50% from 2024 Highs, Market Sentiment Turns Bearish

Solana (SOL) has experienced a steep market correction over recent weeks, with its price plummeting nearly 50% from its 2024 high of $264.

Solana (SOL) has experienced a steep market correction in recent weeks, with its price plummeting nearly 50% from its 2024 high of $264 to reach a recent low of $131.

Currently hovering around $142, the cryptocurrency has seen a troubling 40% decrease over the past month, raising concerns among investors and market watchers alike.

The once-celebrated altcoin hit a five-month low of $131 on Tuesday morning, marking its lowest valuation since September. This dramatic reversal of fortune represents a stark contrast to Solana’s performance last year, when it was consistently ranked among the market’s top performers.

As the broader cryptocurrency market continues to adjust, Solana’s price decline has been a subject of keen interest, especially given the token’s popularity among traders and investors.

According to analyst Miles Deutscher, Solana’s market sentiment has descended to its lowest point in over a year. This negative shift in investor attitude hasn’t been observed since early 2024 when SOL first reclaimed the $100 threshold, underscoring the severity of the current downturn.

The broader cryptocurrency market has also suffered a correction, with Bitcoin falling from $96,000 to below $90,000 for the first time since November. This market-wide retraction has created additional headwinds for alternative cryptocurrencies like Solana, which typically follow Bitcoin’s price trends with greater volatility.

Furthermore, evidence of waning market interest can be seen in Solana’s trading volume, which has decreased by 18% to $13 billion. This reduction in trading activity indicates that many investors are choosing to wait on the sidelines until clearer market signals emerge.

The shift toward bearish sentiment comes after Glassnode’s Net Unrealized Profit/Loss metric indicated that SOL investors have entered a phase characterized by fear. This represents a complete reversal from the greed and optimism that dominated market sentiment in previous months.

Multiple factors beyond the general market downturn have contributed to SOL’s price decline. The rise in Solana-based meme coin scams, particularly following the launch of the Pump.Fun platform, has eroded trust in the ecosystem. The LIBRA token scam stands out as a particularly damaging incident, resulting in losses exceeding $100 million.

The total market capitalization of Solana-themed meme coins has contracted dramatically from $25 billion in January to just $8.6 billion currently. This collapse has triggered what market observers describe as a capital migration from Solana to Ethereum, as investors seek more stable options within the cryptocurrency landscape.

Activity metrics on the Solana network have also shown worrying trends, with decreases in gas fees, decentralized exchange (DEX) volume, and active address counts. These indicators point to reduced usage of the Solana blockchain and diminishing faith in its ecosystem.

The final factor in the equation is the scheduled token unlock on March 1, which will release 11.2 million SOL tokens into circulation as part of the FTX distribution plan. This event is generating additional selling pressure as the market anticipates an increase in supply that could drive prices lower in the near term.

Market Analysis: Critical Support Zone, Recovery Potential, and Technical Indicators

As many market analysts are monitoring the critical support zone between $120 and $140, which they consider essential for SOL to maintain. Crypto analyst Ansem remarked, “The $120-$140 range is a must-hold area. Shorting after a 50% drop in a month is not a good trade, but overall, I remain bearish on most crypto assets in the high timeframe.”

Should Solana succeed in holding this support level, some analysts believe it could recover toward the $170 resistance area. However, a failure to maintain the $120 level might trigger a test of the psychological $100 support, with some bearish forecasts suggesting a potential drop to as low as $80 or even $70.

Analyst Ali Martinez has drawn comparisons between the SOL/BTC trading pair and ETH/BTC’s historical price behavior. According to Martinez, if this pattern continues to hold, SOL/BTC could be headed for a 50% decline to 0.0008, which would push Solana’s price down to approximately $70.

Despite these concerning projections, other market watchers maintain a more balanced perspective. Altcoin Sherpa views the $90-$125 range as a “good area overall” for purchasing SOL, asserting that Solana is not “dead.” While he expects continued volatility, he anticipates an eventual recovery from current lows.

From a technical standpoint, the $130-$140 zone has historically functioned as a key support level during both the 2021 all-time high breakout and the 2024 rally. Maintaining this area will be vital for Solana’s performance in the weeks ahead, especially with the token unlock event