Solana's price recovery faces threats as memecoin activity dries up on the SOL blockchain and network usage drops significantly.
Solana (SOL) faces further downside risk amid a significant drop in memecoin activity on the blockchain as investors shift their focus to assets with strong fundamentals due to geopolitical tensions.
At press time, Solana was trading at $144 after an 8% drop in seven days, while the total market cap for memecoins built on the blockchain has fallen below $10 billion.
Solana's price faces downside risks.
$SOL price remained under bearish pressure today, June 19, with daily trading volume down to $3.56, according to data from CoinMarketCap. Over the past seven days, the altcoin has experienced intense volatility, suffering from a weekly high of $160 and a weekly low of $140.
While SOL's price weakness reflects the trend of the entire altcoin market, it faces the risk of further downside.
Data from DeFiLlama shows that the Total Value Locked (TVL) on the Solana network is $8.34 billion, a significant drop from January’s high of $1.98 billion.
Another sign of slowing network growth is the declining market cap for stablecoins built on the blockchain. This metric has fallen from $13 billion to $8.34 billion in the space of six weeks.
In addition, the ongoing flow of capital from altcoins to Bitcoin is also predicting a bearish Solana price.
This rotation is reflected in the declining altcoin season index, which stands at 20, indicating that it is currently the season for bitcoin and that altcoins such as SOL are facing bearish pressure.
SOL Meme coin activity dried up.
Memcoin activity on the $SOL blockchain is slowing significantly, derailing the price recovery despite the increasing likelihood of Spot Solana ETF approval.
Data from CoinGecko shows that the total market cap of meme tokens created on the network has fallen below $10 billion after significant losses.
In the last seven days, the top five meme coins on the network have lost an average of 10% of their value. Additionally, market interest is waning as none of these tokens have registered more than $300 million in trading volume in the past 24 hours.
The Solana meme coin launch pad PumpFin has also recorded a drastic drop in Decentralized Exchange (DEX) volume.
According to DeFiLlama, weekly DEX volumes on the PumpFun launchpad hit $351 million, the lowest volume since September 2024. This launch pad has played a key role in driving up $SOL prices in the past, but with lower usage, bearish effects on SOL may occur.
Nevertheless, institutional interest towards SOL continues to grow, despite cooling meme coin hype and increasing downside risk to Solana's price. Recently, SOL Strategies filed for Nasdaq listing with a treasury of over 420,000 SOL tokens.
In summary, Solana's price faces additional downside risk amid declining network activity. Additionally, low interest in memecoins created on the SOL network is also having a bearish effect on the price and may increase downward pressure.
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