The cryptocurrency market is no stranger to volatility, and Solana (SOL) has recently felt the sting of a notable price sink. As investors and enthusiasts scramble to make sense of the latest downturn, questions abound: What’s driving this dip, and where is Solana headed next?
In this analysis, we’ll dive into the factors influencing Solana’s recent price movements, explore market trends, and offer insights into what might lie ahead for this high-speed blockchain contender. Whether you’re a seasoned trader or a curious observer, here’s what you need to know about Solana’s next potential steps.
About Solana
Solana is a high-performance Layer 1 blockchain platform designed for dApps and cryptocurrencies. It’s known for its speed and scalability, capable of processing thousands of transactions per second with low fees, thanks to its unique architecture. On paper, it’s designed to handle up to 65,000 TPS at peak capacity.
Unlike some older blockchains like Bitcoin or Ethereum (pre-merge), Solana uses a consensus mechanism called Proof of Stake (PoS) combined with a novel system called Proof of History (PoH). PoH essentially timestamps transactions to create a verifiable order of events, which helps the network stay fast and efficient without sacrificing security.
Solana is notably building its memecoin ecosystem, which is considered a benchmark for its impact relative to other blockchains, alongside significant development in areas like DePIN, AI, and Gaming.
Learn more: Top 10 Solana Meme Coins Worth Investing In 2025
Solana Ecosystem Current Issue
First, the information that the largest Memecoin Launchpad in the crypto market on the Solana system, Pump.fun, is starting to build their own AMM Liquidity Pools. This can explain why this Launchpad wants to independently collect fees from LPs, instead of relying on other DeFi protocols, including Raydium.
Source: CoinGecko
That makes the value of the $RAY token drop seriously today, up to 30.5%.
Notably, according to on-chain data from Arkham, historical trends indicate that pump.fun frequently tends to liquidate SOL acquired from memecoin transaction fees onto centralized exchanges (CEXs). The move towards self-managed AMM liquidity pools could potentially increase the fee revenue generated from memecoin creation, thereby enabling the project to sell even more SOL.
Indeed, today witnessed a negative reaction in the $SOL price (a 6.2% decrease).
Source: Arkham Intelligence
Data from DeFiLlama also indicates a significant decline in capital inflow in recent days. Specifically, leading platforms, including Jupiter, Meteora, Kamino, and Marinade, have all experienced substantial decreases in Total Value Locked (TVL) over the past month.
Source: DeFiLlama
It should be noted that the depreciation of SOL and its ecosystem also stemmed from indications that the investment fund and market maker Wintermute were selling $SOL, with the token value exceeding $17 million.
🚨 NEW: Market maker Wintermute has withdrawn a large amount of $SOL from Binance in the past 4 hours. pic.twitter.com/e3zjZGy2cL
— Cointelegraph (@Cointelegraph) February 24, 2025
Solana Price Prediction
Despite the aforementioned predominantly negative factors impacting Solana, it is crucial to recognize that Solana remains a significant source of liquidity within the broader market.
Furthermore, it is noteworthy that the $TRUMP token, a PolitiFi asset associated with the U.S. presidential figure, achieved an all-time high on January 19th. This token, operating within the Solana ecosystem, inadvertently catalyzed an upward trend across the entire blockchain’s ecosystem. According to a survey conducted by NFTevening, 14% of Americans have acquired $TRUMP. This data underscores the substantial appeal of cryptocurrency and indicates that, given a sufficiently impactful catalyst, the extensive Solana ecosystem, including SOL, retains the potential for robust growth.
Source: CoinGecko
Looking Ahead
11.2 million $SOL, originating from the FTX bankruptcy auction, are scheduled for unlocking on January 3rd, representing a value of approximately $2.06 billion. This event is anticipated to introduce significant volatility to the $SOL market leading up to the unlock date. Historically, previous token unlocks from the FTX bankruptcy proceedings have been accompanied by consistent accumulation by investment funds engaging in dip-buying strategies.
Regarding the short-term outlook, $SOL is likely to establish a support floor within the $128-$134 range. However, as previously stated, a potent catalyst, akin to the $TRUMP case, could precipitate a remarkably robust recovery.
According to Bitwise Europe, the valuation of $SOL has the potential to exceed $2,000.
The $SOL price prediction for the first half of 2025 suggests a potential reattainment of the $250 mark.
Disclaimer: This analysis is intended solely for the purpose of projecting token price trajectories and should not be construed as investment advice.
