What’s Driving the 10% Drop and Bearish Sentiment

Solana has been one of the worst-performing cryptocurrencies in the past 24 hours, falling 10% to $162. The sharp decline comes as network activity slows and bearish sentiment grows.

Here are the four key reasons behind Solana’s price drop today.

Solana Linked to High-Profile Scams

One major reason behind Solana’s poor performance is its mention in high-profile rug-pull scams. Reports have surfaced linking a Solana wallet to multiple fraudulent projects, including Libra (LIBRA) and Melania (MELANIA), both of which have ties to political figures. 

These projects generated massive profits through manipulative tactics before disappearing, leaving investors at a loss. Because of this, people are losing trust in Solana.

Sharp Decline in Network Activity

Another concerning factor is the fall in Solana’s on-chain activity. The number of users on the Solana network has dropped from 18.5 million in November to 8.4 million, a 55% fall. 

Also, total money moved on Solana has dropped from $2 billion to $26 million. With fewer people using it, Solana’s price is struggling.

Upcoming Token Unlocking

Investors are also bracing for a large supply increase in the coming months. Over 15 million SOL tokens, worth over $7 billion, are set to be unlocked between February and April. 

This increase in circulating supply could create more selling pressure, further weakening Solana’s price. Market analysts have advised caution, as the unlocking event could bring additional volatility.

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Losing Ground to Bitcoin and Ethereum

Solana is also underperforming against major cryptocurrencies. The SOL/ETH trading pair has dropped by 28% since early February, showing that Ethereum is gaining strength over Solana.

Additionally, data from LookOnChain reveals that $772 million worth of stablecoins have left Solana’s ecosystem in the past week, another sign that investor confidence is fading.

For Solana to recover, trust in the network must improve, and trading activity needs to pick up. Until then, SOL could continue facing downward pressure in the market.

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