The decline in Solana’s price lately comes amid growing concerns over ecosystem security. A wave of questionable meme tokens and apparent scams on the network has left many investors wary. While SOL had previously shown resilience, the current market sentiment reflects broader unease about platform risks and alleged manipulation schemes.
Key support levels have failed, triggering liquidations and further selling pressure. Meanwhile, technical indicators signal continued weakness, reinforcing bearish sentiment. As the sell-off intensifies, traders are cautious, with some analysts warning against leveraged long positions.
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Rug Pulls and Solana Meme Coins Fuel Investor Concerns
Solana’s reputation has taken a hit due to the rising number of rug pulls on its network. CryptoCache, a market analyst, pointed out that fraudulent projects are affecting investor confidence, causing many to exit the ecosystem. “There are so many rug pulls going on in the Solana network that it’s causing a lot of problems,” he noted in a recent analysis.
One of the most notable incidents involved a heavily promoted token called Libra, which eventually collapsed. “A president literally promoted the coin, and then it rug-pulled a whole bunch of people,” the analyst added. The influx of low-quality meme coins is further dampening sentiment, with traders questioning the sustainability of Solana’s recent growth.
Solana’s price action has been marked by failed support levels and heavy liquidations. CryptoCache highlighted that a key support level at $185 did not hold, leading to a deeper pullback. “Right now, it’s just a pure belly flop… late longs are getting destroyed,” he said.
Traders who entered long positions around $202 were forced to exit at $190, contributing to the sell-off. The liquidation zones between $186 and $190 were wiped out, exacerbating downward pressure. CryptoCache now sees $190 as a strong resistance level, making any near-term recovery more difficult.
SOL Market Manipulation and Large Short Positions
Some analysts suspect that Solana’s downturn is not entirely organic. CryptoCache suggested that large entities are aggressively shorting SOL, leading to forced selling by smaller traders. “I hate to use the word manipulation, but that’s exactly it,” he stated, emphasizing that retail investors are not driving the sell-off.
With Solana facing over $2 billion in liquidations, speculation is growing that a major holder is behind the pressure. “Why is one person—likely the largest holder—shorting this coin?” the analyst questioned. If true, this could mean further downside unless market conditions shift.
Declining Activity and Bearish SOL Technical Indicators
Market data further reflects Solana’s weakening momentum.
Ali, a market analyst, noted that the number of active addresses on the Solana network has dropped from 18.5 million in November to just 8.4 million. This decline signals reduced user engagement, which could indicate fading network strength.
The number of active addresses on the #Solana $SOL network has dropped from $18.5 million in November to just $8.4 million today! pic.twitter.com/sXr1XWQrOz
— Ali (@ali_charts) February 18, 2025
On the technical front, Solana is showing signs of continued weakness. CryptoCache pointed out that the 50-day SMA is at risk of breaking down. The RSI has fallen below 50, its lowest level since June 2023.
A bearish divergence on the MACD and Stochastic RSI suggests that the selling pressure may persist. “If we break below 175, it would be very bad news,” the analyst warned.
Read also: XRP Price Prediction For February 18
Caution Advised for Solana Traders and Investors
Given the volatility, analysts are advising caution. CryptoCache strongly discouraged leveraged long positions, stating, “There’s no reason to consider a long position with this coin right now.” He even joked that the market is so irrational that taking the opposite of logical trades might be the best strategy.
For long-term believers in Solana, dollar-cost averaging (DCA) remains a preferred strategy. “If this is still a coin you believe in, just dollar-cost average on the way down,” he suggested.
Even though there is strong resistance at $190, Solana may eventually bounce back. Analysts concur that a major determinant of Solana’s future course of action will be the success of Bitcoin, which has been sluggish lately.
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