Solana\u2019s (SOL<\/a>) price trades 52% below its all-time high of $295 on Jan. 19. The 41% drawdown over the last month accompanies a 40% drawdown in the total value locked on Solana, with SOL\u2019s technical setup pointing to further losses ahead.<\/p>\n The total value locked<\/a> (TVL) on the Solana blockchain has plummeted 39.2% over the last month, the largest monthly drawdown since November 2022, when the FTX exchange collapsed<\/a>.<\/p>\n Solana\u2019s TVL has fallen from an all-time high of $12.1 billion reached on Jan. 24 to $7.4 billion at the time of writing.\u00a0<\/p>\n Solana TVL and onchain volumes. Source: DefiLlama<\/em><\/p>\n<\/figcaption><\/figure>\n TVL measures the total value of all assets locked into decentralized finance<\/a> (DeFi) protocols. As TVL increases, that means more coins are deposited into DeFi protocols and can indicate bullish sentiment. A falling TVL shows that investors are pulling their funds out of the ecosystem as well as decreasing network activity and liquidity.<\/p>\n Data from DefiLlama shows<\/a> that the subsequent decrease in TVL was led by Raydium, with a whopping 53% drop in 30 days. Other major decentralized applications such as Jupiter DEX, Jito liquid staking, and Save Lending registered a 25%, 41% and 42% declines, respectively.<\/p>\n TVL locked on Solana\u2019s top DeFi protocols. Source: DefiLlama<\/em><\/p>\n<\/figcaption><\/figure>\n These directly impacted Solana\u2019s onchain volumes, which dropped from a weekly collection of $97 billion during the second week of January to $11 billion this week.<\/p>\n These metrics indicate a glaring shift in investors\u2019 trust in the Solana ecosystem, leading to a 20-40% decline in activity on average over the past month.<\/p>\n The drop in Solana\u2019s TVL mirrors a drop in memecoin market capitalization as prices tank across the board.<\/p>\n Most Solana-based memecoins have posted double-digit daily losses, as shown in the figure below. A majority of these tokens are 80% to 90% from their peaks.\u00a0<\/p>\n Solana-based tokens performance. Source: <\/em>CoinGecko<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n As a result, Solana’s collective memecoin market cap has dropped from its peak of $25 billion in December 2024 to $8.3 billion today. This represents a 68% drop in less than three months.\u00a0<\/p>\n Related: <\/strong><\/em>Solana (SOL) price sell-off accelerates \u2014 Will traders defend the $130 support?<\/strong><\/em><\/a><\/p>\n This drop in the prices of Solana-based memecoins and market cap is preceded by decreasing DEX activity on the layer-1 blockchain.\u00a0<\/p>\n The chart below shows the daily DEX trading volume of Solana memecoins\u2014including those deployed on Pump.fun\u2014decreased from $22.1 billion on Jan. 19 to $1.6 billion on Feb. 26<\/p>\n Memecoin trading volume on Solana. Source: <\/em>Blockworks Research<\/em><\/a><\/p>\n The decrease in memecoin activity on Solana indicates low network activity and dwindling usage, negatively impacting demand and SOL price.\u00a0<\/p>\n From a technical perspective, SOL\u2019s price action has completed a double-top pattern as shown on the daily chart below. Now, the question is how low can Solana go? <\/p>\n SOL price is sitting on immediate support provided by the neckline of the prevailing chart pattern at $135. Losing this support will see the price drop to sweep the liquidity between the Sept. 6, 2024, range low at $120 and the Aug. 5, 2024, range low of $110. Such a move would represent a 22% decline from the current price.<\/p>\n SOL\/USD daily chart. Source: Cointelegraph\/<\/em>TradingView<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n On the other hand, the position of the RSI at 28 paints oversold conditions. This suggests that $135 could provide a good entry position. Increased demand from this level, accompanied by high volumes, could initiate a sustained recovery for SOL in the coming days.\u00a0<\/p>\nSolana TVL drops $5B in 30 days<\/strong><\/h2>\n
Solana memecoin market cap plummets 70%<\/strong><\/h2>\n
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SOL price eyes a further 20% drop<\/strong><\/h2>\n