As the broader cryptocurrency market experiences a downturn, with Bitcoin and Ethereum seeing declines, Solana’s price has also pulled back significantly. The token has retreated to a critical support level at $164, leading to discussions about whether Solana (SOL) can maintain its upward trajectory or if further declines are imminent.
The potential for a deeper decline in Solana’s price is exacerbated by news that the U.S. Securities and Exchange Commission (SEC) is investigating crypto companies as part of its Ethereum probe. The heightened regulatory concerns could amplify the pullback in SOL price.
Solana has been a focal point for investors recently, especially after its price surged past $200 for the first time since November 2021. Over the weekend, Solana experienced a significant surge in network activity, surpassing Ethereum in total trading volume.
On March 16, Solana’s trading volume reached $3.52 billion, surpassing Ethereum by $1.1 billion. This surge was largely driven by increased demand for Solana-based memecoins, with the newly launched Book of Meme (BOME) memecoin achieving a market capitalization of $1.45 billion in just 56 hours.
Solana’s decentralized finance (DeFi) sector has also experienced substantial growth, with its total value locked (TVL) increasing by over 80% in the past month. This surge has propelled Solana’s DeFi TVL to its highest point in two years, placing it among the top five DeFi networks by TVL.
Despite the recent decrease in trade volume, Solana’s market capitalization has reached $91.56 billion. The cryptocurrency has also seen a 9.05% rise in open interest to $3.20 billion, although short traders have been dominant in liquidations as they seek to mitigate losses from the ongoing price rally.
In other developments, the Solana community has begun to voice concerns about meme coin presales, which have become more frequent and dubious. In these presales, crypto traders often send large sums of money to unfamiliar individuals in the hope of getting in early on the next big meme coin like BONK, WIF, or BOME.
Following the multi-billion dollar surges of several Solana-based meme coins over the past three months—a trend that has thrust the blockchain back into the spotlight—many crypto influencers are capitalizing on the atmosphere of fear of missing out (FOMO). They are offering early, discounted allocations of certain meme coins before their launch to traders who send SOL to the promoters’ wallets.
Featured Image: Freepik
