Market sentiment for Solana (SOL) has reached its lowest point in a month, as reported by the on-chain intelligence platform Santiment. This shift reflects a growing bearish attitude among investors regarding the sixth-largest cryptocurrency by market capitalization. However, the data analysis suggests that this negative sentiment could signal an impending price rebound.
Solana Sentiment Plunges to Monthly Low
The last instance of significant bearish sentiment among SOL investors was noted around January 20, coinciding with a drop in the asset’s value to $232. Since that period, Solana’s price has declined over 30%, now resting at approximately $161, according to CoinMarketCap. From its peak on January 19, where it reached $293, SOL has experienced a staggering decline exceeding 45%.
The recent drop in Solana’s valuation to a three-month low of $161 has instigated frustration within the investor community. Many market participants are drawing parallels between Solana’s current trajectory and the trends observed during the collapse of the FTX crypto exchange in November 2022.
Market analysts attribute this price decline to the precarious state of the meme coin sector. Solana has emerged as a leading blockchain for the creation and minting of meme coins, playing a significant role in various pump-and-dump activities over the past month. Insiders are reported to have withdrawn over $200 million in liquidity from meme coin projects launched on the Solana network this year alone.
As SOL’s price continues its downward trend, network activities are also diminishing. Recent reports from CryptoPotato indicate that Solana’s decentralized exchange (DEX) trading volume plummeted to $2.61 billion on February 16, marking the lowest level since mid-December 2024. This decline in trading volume has been consistent over the past five weeks.
SOL May Experience a Bounce
Despite a daily increase of 2% at the time of writing, bringing the price to $169, the Solana community remains cautious about the asset’s future price movements. Market pressures seem relentless, and with 11.2 million SOL, valued at over $1.89 billion, expected to be unlocked for trading on March 1, there is concern that this could exacerbate selling pressure.
Nevertheless, Santiment posits that SOL could be on the verge of a significant rebound in the forthcoming weeks, as market behavior often defies collective expectations. The firm notes,
“While discussion rates are extremely high and crowd sentiment is bearish, this is historically a signal that there is a high bounce probability.”
This analysis underscores the inherent unpredictability of the cryptocurrency market, highlighting that current bearish trends may set the stage for an unexpected recovery.
The insights from Santiment serve as a reminder for investors to remain agile and informed in the face of shifting market dynamics.
