Solana Death Cross Signals Potential Struggles as Meme Coins Plunge

Solana’s price has dropped significantly, with the cryptocurrency forming a “death cross” pattern on its charts, indicating a potential for further declines. The price of SOL has crashed to around $138, a 53% decrease from its peak earlier this year. This decline is part of a broader downturn in the Solana ecosystem, especially within the meme coin sector, where the market cap of Solana-based meme coins has plummeted from over $25 billion in January to just $7.6 billion today.

Meme coins associated with Solana have taken a heavy hit. For instance, Official Trump, the largest Solana meme coin, has dropped by 10% over the past week and currently has a market cap of $2.4 billion. Other meme coins like Bonk, Dogwifhat, Pudgy Penguins, and Fartcoin have all seen significant declines of over 20% in the past seven days. The meme coin sector has gained a reputation as “toxic” due to several high-profile crashes, most notably the Libra coin, which rose to a $4 billion market cap before crashing.

On top of the meme coin woes, Solana’s price has also been negatively affected by the diminishing odds of it being included in President Trump’s crypto stockpile. A recent Polymarket poll indicates that the chances of a Strategic Solana Reserve have dropped to just 25%, down from over 40% earlier this month.

However, there is a silver lining for Solana: the potential approval of a spot SOL ETF by the Securities and Exchange Commission later this year. According to Polymarket, the odds of this happening have risen to 86%, which could provide a positive catalyst for the token.

Despite these glimmers of hope, the technical indicators paint a grim picture. Solana’s price has fallen below crucial support levels, including the ascending trendline that had been in place since August 2024. It also dropped below the $170 support level, which was previously the lowest point in January 2025. The death cross pattern, where the 50-day moving average crosses below the 200-day moving average, suggests that further declines could be ahead. Analysts are now targeting the psychological support level at $100 as the next potential support point.

Solana’s blockchain, which launched in 2020, was designed to be fast, efficient, and low-cost, with a unique consensus mechanism called Proof of History (PoH) combined with Proof of Stake (PoS). These features made it particularly attractive for developers of meme coins, offering low transaction fees, high transaction speeds, and a developer-friendly environment. This ease of use and scalability helped boost Solana’s popularity in the meme coin space, even though such coins come with inherent risks and volatility.

In summary, Solana is currently facing a challenging period, with a significant price drop, a struggling meme coin ecosystem, and the looming risk of further declines. However, developments like the potential ETF approval offer some hope for the future.