Highlights
- The Price chart of the Solana price is under pressure from the LIBRA memecoin controversy, resulting in giant losses for investors.
- Recently, USDT and USDC stablecoins on Solana have dropped by $772 Million, while Ethereum has gained $1.1 Billion.
- The upcoming event on the horizon is raising fear more, as the FTX auction will unlock 11.2 million SOL, which is raising concerns about increased liquidity.
Solana price is experiencing a significant fall, driven by several factors; when writing, it dipped to $168. The controversy surrounding the memecoin, LIBRA on Solana, has played a role in the decline.
The memecoin quickly turned into one of the worst rug pulls in recent history.
On-chain data from analytics platform Lookonchain has revealed troubling trends regarding the stablecoins on Solana.
While Solana is losing its stablecoin market share, its main competitor, Ethereum (ETH), is seeing an increase in stablecoin adoption.
Another significant factor weighing on the Solana price is the Fear, Uncertainty, and Doubt (FUD) surrounding FTX’s planned SOL dump. This situation has further fueled concerns among investors.
Keep reading to find out more and to know what lies ahead for the Solana price.
ALIBRA Rug Pull Added Weight on Solana Price Momentum
The recent turmoil surrounding the LIBRA has significantly impacted the Solana price.
Initially, Argentinian President Javier Milei publicly endorsed LIBRA, claiming it would bolster the national economy. This endorsement led to a brief surge in the coin’s price, but it quickly came crashing down.
Ultimately, LIBRA became one of the most damaging rug pulls in recent history. According to crypto firm LMK, at least 24 addresses lost over $1 Million, while 61 others faced losses exceeding $500,000.
One unlucky investor who spent $5.6 Million to acquire 2.1 million LIBRA tokens ended up selling for just $430,000, resulting in a staggering loss of $5.1 Million.
However, in response to the fallout, Milei has initiated an investigation into the coin, establishing an ‘Investigation Task Unit.’
For many curious, those rug pulls unfolded because the early insiders received a disproportionate share of the LIBRA token supply, which allowed them to manipulate it and execute big sell-offs.
This led to coordinated liquidation activities that, almost immediately after the launch, were made public.
The swift decline of the LIBRA token has negatively affected market sentiment across the board. This incident is not isolated; a similar situation occurred with the ‘Squid Game’ token (SQUID) on the Base blockchain, which plummeted 99% within hours, resulting in significant investor losses.
The collapse of LIBRA from its all-time high has further intensified the ongoing liquidity crunch affecting the Solana price, leaving investors anxious about the future.
USDT & USDC on Solana Decline, And Ethereum is Absorbing that Liquidity
Data from Lookonchain reveals a stark contrast in the growth of stablecoins on Solana and Ethereum, particularly Tether’s USDT and Circle’s USDC.
Over the past week, the USDT and USDC stablecoins on Solana have plummeted by $772 Million, while those on Ethereum have surged by $1.1 Billion during the same period.
This data indicates that while Solana is losing its USDT and USDC stablecoins, Ethereum is successfully accumulating them. The decline in stablecoins on Solana crypto has directly contributed to the falling prices of SOL.
It remains a fact that stablecoins have become a most important factor for blockchain growth, and its decline is raising concerns.
As USDT and USDC are increasingly relevant for cross-border payments, remittances, and on-chain settlements, making their presence is crucial for a growing user base.
Now, the drop in transactions on Solana crypto suggests a diminishing dominance in the Decentralized Finance (DeFi) space, which has dampened investor interest and led to the ongoing price decline.
Earlier this year, the Solana crypto’s stablecoin growth outpaced that of other major blockchains, positioning it as the top stablecoin network in the market. At that time, the Solana price soared above the $200 mark. However, with stables shedding, its price is now falling.
Solana Price Affected by Fear as FTX’s Planned SOL Dump is on the Horizon
Another significant factor contributing to the decline in the Solana price is the Fear, Uncertainty, and Doubt (FUD) surrounding FTX’s planned SOL dump.
According to analyst arvid_crypto on X, 11.2 million SOL, is set to be unlocked during the FTX bankruptcy auction on March 1. This unlock will account for nearly the entire remaining stash of 61,853 SOL held in FTX’s reserves.
Following its collapse in 2022, the defunct FTX exchange liquidated its Solana holdings through three separate auctions. Here, the top three buyers, including OTC traders Galaxy, Pantera, and Figure, acquired these coins at prices ranging from $64 to $102.
These investors purchased large quantities of SOL to diversify their portfolios or capitalize on the growth potential of the Solana network.
Additionally, as the unlock date approaches, investors are increasingly concerned about a potential surge in Solana’s liquidity, which could further pressure the Solana price downward.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
