Are Meme Coins Hurting Solana? Rising Selling Pressure Sparks Investor Concerns
As the wider meme coin market continues to decline, Solana faces increasing sales pressure and negative sentiment, which affects overall market performance. Analysts believe that excessive speculation on meme coins is a key reason why Altcoins, including Solana, performs poorly compared to Bitcoin. The hype nature of these tokens has led to extreme volatility, making investors more cautious about Altcoin exposure.
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Meme coins are now seen as a risk factor for the Solana ecosystem. Recently, the meme coin approved by Argentine President Javier Milei involved the Libra carpet rag (Libra) has attracted attention among investors. The incident created confidence in the network as it highlights the dangers of speculative trading and potential scams within the Solana ecosystem.
As a result, SOL has dropped 10% over the past week, down 40% from its January peak, indicating a clear trend in momentum. In addition, trading volumes on diversified exchanges (DEXs) are greatly reduced, reflecting the growing investor hesitation. Solana and The market is facing a critical momentanalysts keep an eye on whether the network can recover from damage caused by meme coin guesses or the expected adverse aspects.
Solana enters a critical stage
Now, the meme coins that have promoted the price increase in Solana for several months are disintegrating, exposing the network to increased volatility and uncertainty. Although Solana benefits from the speculative boom of meme coins, it is only a matter of time before the highly speculative market faces reality and starts to cause problems.
Crypto Analyst Axel Adler Analysis on xWarning meme coins are actively damaging Sorana’s long-term sustainability. The recent example is The Libra Rug, a meme coin that has been attracted by its connection to Argentina President Javier Milei, but only collapses, leaving investors Caused losses. The campaign has raised investors’ attention and accelerated sales pressure on Solana, which has dropped 10% over the past week, down 40% from its January peak.
In addition to price action, Solana’s diversified trading (DEX) volumes were also hit, down 25% last week, while Raydium Dex alone fell 47%. The decline marks a weakening of investor confidence in Solana’s Fefi and Trading ecosystem.
On top of that, on March 1, 11.2 million Sols (the tokens, tokens originally sold during the FTX bankruptcy) will be unlocked later by major companies such as Galaxy, Pantera and Tigure. If these companies decide to uninstall their holdings, this large token unlocking may put further pressure on them.
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With Meme Coin’s speculation cooling, Solana is now facing a critical test: Can it restore investor trust and stabilize, or will it further downward as sales pressures intensify? The next few weeks are crucial to identify the ability of the network to recover from this downturn.
Sol holds key needs
Solana (Sol) trades at $184 after losing its 200-day exponential moving average (EMA), which is around $190, and the signal increases sales pressure. Price is now testing the 200-day simple moving average (SMA), a critical level of long-term support that the Bulls must prevent further contributions.
If the Bulls can’t hold a 200-day SMA, a massive correction may be made, which may push the SOL toward lower demand zones, $175 or even $160 around. As speculations on meme coins continue to fade away, the emotions around SOL remain vulnerable, delaying Solana’s ecosystem.
In order for bullish momentum to return, Sol must return to the $190 level as soon as possible and push it higher as soon as possible. The selling price of rest and holding above $200 will confirm a short-term reversal, helping Saul recover and may target a higher supply level, around $220-230.
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However, failure to rebound from current levels will indicate further downside risks, which may entail liquidation and sales pressure. Given the negative sentiment of meme coins and the upcoming token unlock, SOL is at a critical turning point, and its next move will determine the direction of the short-term market.
Featured images from DALL-E, charts from TradingView
