Understanding the Continued Downtrend of Solana’s Price Since January

As we analyze Solana's price movement throughout the year, a clear but concerning trend emerges. After reaching a peak around $296 in January, the price experienced a rapid decline that has persisted over the following months. While many traders attribute this downturn to a general risk-averse attitude in the crypto market, a detailed analysis by crypto expert Ardi on X reveals that underlying factors began influencing Solana's price long before its January high.

Key Takeaways

Solana peaked at $296 in January but has since been in a steady decline.
Analysis indicates that distribution began well before this peak.
Retail investor activity remains high even as Solana's price drops, while larger investors are less active.
The success of memecoins has heavily influenced Solana's price movements.
Currently, Solana trades at $121.50, marking a 58.6% decrease from its January peak.

Solana

The Downtrend Started Before the January Peak

Since September, Solana has been on a downward trajectory, having reached a lower high of approximately $247 compared to its January peak of $293. A crucial insight from Ardi’s analysis indicates that the all-time high in January was not the initiation of a distribution phase, but rather the endpoint of one. His accompanying chart illustrates that selling volume had begun to rise months prior to the peak in January, implicating that significant holders started strategizing their exits well in advance.

This suggests that instead of the January high signifying the start of a new growth phase, it appeared more as a final surge of a rally. After this, the price continued to form lower highs, with each attempt to rebound demonstrating weak momentum. Notably, Solana struggled to reach new all-time highs while other major cryptocurrencies like Bitcoin, Ethereum, XRP, and BNB were achieving new records throughout the year.

The data also highlights a growing disparity between retail and institutional investor activity. Cumulative delta metrics imply that retail-sized wallets have remained engaged throughout the year, increasing their activity despite Solana's declining price. Conversely, mid-sized and institutional wallets have been trending downward since the January peak.

Solana
Source: Chart from Ardi on X

Are Memecoins Driving Solana's Price Movements?

Ardi’s insights further prompt us to consider what is currently propelling demand for Solana. Beyond retail trade activities on the platform itself, one noteworthy source of consistent market engagement has been the memecoin sector. The successes of notable meme coins like Cat in a Dogs World (MEW), Peanut the Squirrel (PNUT), and Fartcoin (FARTCOIN) during the latter half of 2024 helped propel Solana to its all-time highs.

A significant event was the launch of the Official Trump ($TRUMP) token in January 2025 on the Solana blockchain, which saw massive gains shortly after its introduction, contributing to January’s price peak. However, in recent months, the TRUMP token, alongside other Solana-associated meme coins, has been on a downward trend, resulting in diminished interest and trading volume compared to last year. This situation raises concerns that Solana’s price is now increasingly influenced by the performance of memecoins within its network.

As of now, Solana is trading at $121.50, which is approximately 58.6% lower than its all-time high in January.

Solana
SOL trading at $121 on the 1D chart | Source: SOLUSDT on Tradingview.com