Solana (SOL) Has Retraced More Than 50% From Its All-Time High, Possibly Driven by Declining Meme Coin Trading Activity

Solana (SOL) has had its worst monthly performance since the FTX collapse in November 2022, falling 38% in the last 30 days.

Solana (SOL) has lost more than 50% from its all-time high of $295 in January, hit as the hype around memecoins, a major contributor to Solana’s massive on-chain volume, appears to be fizzling out.

Solana’s price performance in February has been its worst since the FTX collapse in November 2022, with the token falling 38% in the last 30 days.

Solana’s decentralized finance ecosystem has seen a significant outflows as a result of this crisis. According to DefiLlama, Solana’s TVL has dropped from $12 billion in early mid-January to $7.13 billion, losing $5 billion in less than a month.

In the last 30 days, Raydium, the decentralized exchange that houses Pump.fun-graduated memecoins, has seen a 50% TVL drop. Capital is also moving to other networks as Solana’s activity wanes. In the past 30 days, more than $500 million has been bridged to Ethereum (ETH), Arbitrum (ARB), and Sonic (SONIC).

SOL is currently trading at $142, having dropped 15% in the last 7 days. Bulls are struggling to establish a support level, with $140 acting as a key threshold. If SOL fails to hold above this level, the next major support lies between $125 and $130. A breakdown below this range could push SOL to its lowest price since August 2024.

SOL needs to recover the $150 mark and witness a resurgence in TVL and on-chain volumes to resume its bullish momentum. Until then, there is still a strong potential for more declines, which increases uncertainty.

An upcoming 11.2 million token unlock on March 1 could further put pressure on SOL. Additionally, there is a low chance of a Solana ETF being approved soon, which lessens the likelihood of an institutional trigger happening right away.

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