Solana, a popular cryptocurrency, is facing a significant downturn in its price and market cap, with experts warning that it could crash to $100 in the near future. The price of Solana (SOL) has dropped by over 57% from its peak earlier this year, falling to $126.5 on March 21. This has led to a decrease in its market cap from over $127 billion to $64.45 billion, wiping out approximately $63 billion in value.
The ongoing crash in Solana’s price can be attributed to several challenges within its ecosystem. One major factor is the collapse of the meme coin market on the Solana network, with the total market cap of Solana-based meme coins plummeting from over $25 billion in January to $7.2 billion. Currently, only Official Trump (TRUMP) maintains a market cap above $1 billion.
This decline in the meme coin market has also had a significant impact on the trading volume of Solana-based decentralized exchanges (DEXs) such as Raydium, Orca, and Meteora. Data from DeFi Llama shows that the volume on these platforms has fallen by over 34% in the last seven days to $8.3 billion. In comparison, DEX protocols on the Binance Smart Chain (BSC) network handled $14.2 billion during the same period, while Ethereum DEXs processed $9.65 billion.
Furthermore, Solana’s DEX protocols have seen a decrease in trading volume over the last 30 days, trailing behind Ethereum. This marks a significant reversal, as Solana had been the most active chain for DEX trading since October of the previous year. The decline in trading volume has also impacted network revenue, with Solana generating only $21.2 million in revenue this month, down from $90 million last month and a peak of $258 million in January.
Technical analysis of Solana’s price chart shows that the coin has been in a strong downward trend, with a death cross pattern forming as the 50-day and 200-day moving averages crossed each other on March 3. The coin is now forming a bearish flag pattern, which typically results in a strong bearish breakdown. If Solana breaks below a critical support level, experts predict that the next target could be around $100, approximately 25% below the current price.
In conclusion, Solana’s price is at risk of further declines as its DEX volume, chain fees, and meme coin market cap continue to plunge. Investors and traders are advised to closely monitor the situation and consider the potential risks involved in trading Solana at this time.