The trading performance of Solana [SOL] has raised eyebrows as it continues to experience losses week after week. Over the last four weeks, SOL has seen a total decline of 38.35%, with the downtrend persisting and resulting in an 8.87% drop.
As of the current moment, SOL is valued at $167.37.
Market analysis by CryptoCrypto indicates a likelihood of further price decreases as market sentiment increasingly favors bearish conditions.
Trading Volume Declines amid Memecoin Impact
Solana’s trading volume has witnessed a significant decrease across both centralized and decentralized exchanges (DEXs), signaling a shift in market sentiment.
Recent reports reveal that SOL’s total transfer volume has dropped from a peak of $2 billion in November to $26 million currently.
When such a sharp decline occurs, it indicates reduced engagement within the ecosystem as funds are withdrawn.
CryptoCrypto attributes this decline to the waning interest in memecoins.
The introduction of the LIBRA token, reportedly associated with Argentine President Javier Milei, has triggered significant sell-offs of SOL.
LIBRA initially reached $4.563 before plummeting to $0.336, marking a 96.63% decline. Trading volume also fell drastically from $963.6 million to $3.60 million.
Similar trends were observed with other memecoin listings like TRUMP and MELANIA.
A notable decrease in trading volume often leads to a sharp price drop as traders seek to secure profits, break even, or limit losses.
Bearing Weight of Two Contributing Factors
According to Luna Crush, Solana’s social engagement is projected to hit its lowest point this year, having declined by 69%. This signifies reduced online community activity that adds pressure to prices as meme enthusiasm diminishes.
The upcoming FTX SOL unlock scheduled for March 1st is expected to further impact price dynamics. Approximately 11.2 million SOL is set to be released into circulation.
An increase in supply alongside low demand typically results in price decreases. The diminishing trading volume reflects weakened demand for SOL.
The impending unlock could lead to additional losses for the asset unless there is a shift in market sentiment.