TL;DR

SOL tanked by 15% daily amid market-wide panic from the global trade war, with analysts alerting about a potential drop to as low as $60. Earlier this month, Solana witnessed a major token unlock and whale sell-offs, which could have added to the selling pressure.

How Worse Can It Get?

Solana (SOL) is among the worst-affected cryptocurrencies following the latest crash of the digital asset market. Its price briefly collapsed below $100 for the first time since February 2024 before slightly rebounding to the current $101 (per CoinGeckos data).

SOL Price, Source: CoinGecko The assets major pullback comes less than three months after its all-time high of almost $290, registered shortly before Donald Trumps inauguration as the 47th President of the United States. The surge back then was partially fueled by the frenzy surrounding some Trump-themed meme coins, which are based on Solanas blockchain.

Ironically, the POTUS, or more specifically, the trade war he declared to the rest of the world, appears to be the main factor behind the recent bloodbath in the crypto market and SOLs crash. 

Several renowned analysts noted the assets plunge, predicting further pain for the bulls in the short term. Ali Martinez believes SOLs dive below $114 could be followed by a slump to as low as $60. This would represent a roughly 40% decline from the current valuation.

Another person, using the X moniker Crypto_Jobs, assumed that Solana could find a key bottom level at approximately $68-$70. 

SOLs recent price decline coincides with a gradual decrease in the total value locked (TVL) in the ecosystem and its DEX volume. Those developments generally signal low user engagement, diminishing traders confidence, and lower liquidity.

It is important to note that Solanas TVL is measured in USD, meaning that if the price of the underlying token drops, the metric automatically goes down even if the same amount of SOL stays locked. DefiLlamas data shows that the indicator hit an ATH of almost $12 billion at the end of January, while currently, it is less than $6 billion.

The Retreat of the Whales

Earlier this month, a total of $200 million worth of Solana tokens were unlocked, which, according to Arkham Intelligence, marked the largest single-day unlock of staked SOL until 2028. Prior to the event, some big investors unstaked and offloaded millions of assets.

Those developments are typically considered bearish in the short term since they increase Solanas circulating supply, which currently stands at over 515 million tokens. 

The whales actions could also spark panic in the community, prompting smaller investors to follow suit and further amplify the selling pressure.