Solana, a prominent player in the cryptocurrency market, has witnessed a dramatic 9.3% decline in value over the last 24 hours, bringing its price down to approximately $166. This downturn is largely attributed to increased selling pressure initiated by recent activities surrounding the Solana-based LIBRA meme coin. The resultant market uncertainty has led to a cautious stance among traders, reflected in the significant drop in active addresses and transaction volumes.
What Factors Contributed to the User Drop?
According to findings from crypto expert Ali Martinez, active addresses on the Solana network have plummeted from 18.5 million in November to just 8.4 million today, marking a staggering decrease of around 55%. Additionally, total transfer volumes have dropped dramatically from $2 billion to only $26 million, raising concerns about Solana’s market viability and the potential for further price declines.
How Will Increased Token Supply Impact Prices?
The looming token unlock scheduled for March 1 will introduce millions of new SOL tokens into the market, exacerbating supply concerns. With Solana currently experiencing a 4.715% inflation rate, market dynamics could shift dramatically with an influx of approximately 15 million new tokens. Trader RunnerXBT warns potential investors to navigate this turbulent landscape with caution.
- Active addresses have decreased from 18.5 million to 8.4 million.
- Total transfer volume has fallen from $2 billion to $26 million.
- Upcoming token unlock could flood the market with new SOL tokens.
- Liquidation rates in futures trading have increased, signaling potential risks.
Traders are urged to stay vigilant as the market shows signs of instability. The developments surrounding Solana’s user activity and market pressures will be critical in determining the asset’s future trajectory.
