Solana’s Struggles: Analyzing Recent Price Fluctuations and Market Influences
In recent trading sessions, Solana (SOL) has encountered significant challenges, witnessing a decline of 9.3% within the last 24 hours, dropping to a low of $166. This represents its weakest point since mid-December, highlighting the cryptocurrency’s current bearish trajectory.
The Impact of Solana-based Meme Coins
The recent downturn in Solana’s valuation can be attributed largely to controversies surrounding Solana-based meme coins, particularly the LIBRA token. The coin experienced a dramatic collapse after receiving, and subsequently losing, the endorsement of Argentine President Javier Milei. This incident has sparked a wave of market anxiety, exacerbating Solana’s difficulties amid dwindling network activity.
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Current Market Performance of Solana
As of the last update, SOL was priced at $169.25, reflecting a 15% decrease over the previous week and a 37% drop over the past month. This persistent decline underscores the bearish sentiment that currently surrounds the token.
AI Forecast for Solana’s Price by March 1
Despite prevailing market volatility, Finbold’s AI-driven prediction tool provides a fresh perspective on Solana’s potential performance between February 18 and March 5. By analyzing technical indicators and market trends, the AI predicts an average SOL price of $170.38, representing a slight 0.04% decrease from its present value of $169.25.
However, AI models present varied projections for SOL’s price trajectory. The most optimistic scenario, forecasted by GPT-4o, anticipates an 11.48% surge, potentially elevating SOL to $190 in the coming weeks. This prediction is contingent on a revival in Solana’s network activity, increased interest in a prospective Solana ETF, and an overall market recovery.
Conversely, Claude 3.5 Sonnet offers a pessimistic outlook, predicting a 10.09% drop, which could see SOL plummeting to $153. This aligns with weakening on-chain metrics, such as a 55% reduction in active addresses since November and declining transaction volumes.
Factors Contributing to Solana’s Current Pressure
In addition to controversies and declining network usage, Solana faces the challenge of an impending major token unlock event. Between February and April, 15 million SOL, valued at $7 billion, will enter the market. Should demand fail to meet this increased supply, Solana may encounter further selling pressure in the coming months.
With critical support at $162, investors are closely monitoring whether Solana can recover from its recent decline or if it will experience additional downward pressure as March approaches.
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