Solana price showed weak performance in the first quarter. After initially soaring to near $300 in January, the SOL coin plummeted by over 57%, ending the quarter at $120. This article explores whether to buy, sell, or continue holding Solana in April 2025.
Why Solana Price Collapsed in Q1
Solana’s crash was primarily due to the ongoing decline in the crypto and stock market. Cryptocurrencies across the board shed over $1 trillion in value as the market cap crashed from over $3.7 trillion to $2.7 trillion. Bitcoin dropped from a record high of $109,200 to a low of $83,000.
Solana also dropped as its ecosystem imploded. The initial surge in January happened as its meme coin ecosystem surged. All these meme coins soared, pushing their total market cap to over $25 billion. Most of these coins plunged, bringing their market cap to about $7.6 billion.
The collapse of the Solana ecosystem affected its network growth and the fees it makes. Data by TokenTerminal shows that Solana’s daily fees have crashed, as shown below.
Similarly, the volume handled by all Solana DEX protocols crashed in the final two months of the quarter as these meme coins imploded.
At the same time, there were concerns about Solana’s role in rug-pull scams because of the ease of creating meme coins. Following the Libra coin launch, which led to investors losing over $4 billion, Javier Milei, Argentina’s president, promoted it.
Thus, previously viewed as a viable Ethereum-killer, Solana is now regarded as an unreliable blockchain associated with meme coins.
Solana Price Prediction: Buy, Sell, or Hold?
The daily chart shows that the SOL price is hanging on a thread since it is trading at $120, a level at which it has repeatedly found support since April last year. It has always bounced back whenever it dropped and retested that support level.
The risk this time is that the Solana price has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMAs) crossed each other on March 4. Also, the coin has formed a bearish flag pattern, characterized by a sharp decline followed by a period of consolidation.
Therefore, there is a risk that the Solana price will have a strong bearish breakdown in April. A drop below the support at $120 will raise the possibility of the coin crashing to the next support level at $100, its lowest point in February 2024. The target of $100 is about 25% below the current level.
READ MORE: Best New Solana Meme Coins to Buy as Altcoin Season Starts
