- Solana has dropped 33% in the past month due to liquidity outflows, memecoin scams, and massive trader liquidations, despite being added to the US Digital Asset Stockpile.
- With $485 million leaving the network in February and a broader crypto market slump, investor confidence remains low, making recovery uncertain.
Solana has had a rough month, with its price plummeting by 33% in the last 30 days, 25% over the past week, and 8% in just the past 24 hours. As of now, Solana is trading at $128.14, with its market capitalization shrinking to $65.22 billion. Despite being included in the US Digital Asset Stockpile alongside Cardano (ADA) and XRP, the token has failed to regain its momentum.
Why Is Solana Dropping?
A major reason for Solana’s decline is liquidity distribution. Since January, over $9.5 billion worth of USDC stablecoins have been minted on the network, but most of it has been redirected into memecoins rather than Solana’s native token. This means Solana has not received the anticipated financial boost, leaving investors disappointed.
Additionally, a staggering $485 million has exited Solana in February alone, with funds flowing towards Ethereum, Arbitrum, and Binance Smart Chain. Many investors appear to have lost confidence in Solana following a series of memecoin scams that have wiped out significant amounts of capital.
Massive Liquidations Shake Solana Traders
Solana traders have faced significant liquidations, with $26.55 million in trades wiped out in the past 24 hours. Notably, long positions worth $23.45 million were liquidated, indicating that traders who were betting on a price recovery were caught off guard.
Memecoin Scams Add to Solana’s Troubles
A recent high-profile scam involving the Libra token has further dented confidence in Solana. This memecoin, which was even endorsed by Argentine President Javier Milei, turned out to be a rug pull. Insiders drained $107 million from investors, crashing the token’s value by 94% within hours. In total, the scam wiped out an estimated $4 billion in investor funds.
Crypto Market Slump Worsens the Situation
The broader cryptocurrency market is also struggling, with the global market cap currently at $2.71 trillion—down 4.29% in a single day. Bitcoin has dropped by 5%, and Ethereum has fallen by 6%. Many had hoped that the recent White House Crypto Summit on March 7 would inject optimism into the market, but instead, prices have continued to slide.
The road ahead looks uncertain for Solana. With investor trust shaken, significant outflows, and growing competition from other blockchain networks, the token will need a strong catalyst to reverse its downward trend. For now, traders and investors will be watching closely to see if Solana can regain its footing or if further losses are on the horizon.
