At the beginning of 2025, the blockchain market was in turmoil, and Solana (SOL), a cryptocurrency once known as the "Ethereum killer", was facing unprecedented challenges. From market value to user activity, from technological advantages to reputation issues, Solana has exposed many deep-seated problems while developing rapidly.
Solana’s Rapid Rise and Current Turmoil
Solana has outperformed Ethereum 23 of the past 49 days, making it the darling of the crypto community. However, as market uncertainty grows, SOL's trend has gradually lost its strength, and many traders and investors have begun to have doubts about its long-term prospects. Recently, Solana has faced challenges not only in terms of price declines, but also in terms of a significant drop in user activity, pressure to unlock tokens, and its association with the controversial meme coin project.
Decline in locked value and sharp drop in activity
The total locked value (TVL) in the Solana ecosystem has dropped sharply from $12 billion to $8.28 billion since January, which is a direct reflection of the gradual loss of investor confidence. In addition, the number of active users has also dropped from 18.5 million in November to 8.4 million today, a 55% drop, which undoubtedly brings a warning to the market.
Memecoin controversy and ecosystem trust crisis
Solana’s association with multiple memecoin projects has become a double-edged sword for its image. Although Bonk and Dogwifhat once attracted a large number of retail investors and their market capitalizations exceeded $4 billion, the subsequent crash caused many people to lose trust in the Solana network. The recent controversy over the LIBRA token and the TRUMP token has not only caused huge market fluctuations, but also made investors doubt the governance capabilities of the Solana ecosystem.
$7 billion of SOL to be unlocked: another challenge for the market
What worries investors the most is the upcoming unlocking of SOL tokens. It is expected that between February and April 2025, 15 million SOL (worth more than $7 billion) will enter the market circulation. This sharp increase in supply will undoubtedly bring huge selling pressure to the market. Analysts point out that the oversupply has begun to affect market sentiment, leading to a continuous decline in the price of SOL. The key support level is $155, while if the selling pressure intensifies, the second support level may fall to $133.
Solana’s Competitiveness and Future: Can It Return to the Top?
Despite the challenges, Solana has not lost its fundamental value proposition as an efficient, low-cost blockchain platform. Compared with Ethereum, Solana's transaction speed and low transaction fees provide it with a strong technical advantage. However, the lack of market resilience, especially its fragile performance in the face of huge market fluctuations, makes Solana still difficult to compete with Ethereum.
