Solana Risks Further Drop Amid $180 Support Retest – Is The SOL ‘Memecoin Fiesta’ Over?

Solana (SOL) recently lost its key support zone amid the controversial Libra (LIBRA) token launch and crash. The cryptocurrency has dropped over 12% in the last three days and some analysts suggest it risks a deeper correction to monthly lows.

The Solana network has been the talk of the town this cycle due to the memecoin frenzy, as it has been the go-to chain for these projects. The cryptocurrency has also been one of the leading tokens over the last year, outperforming most altcoins in 2024.

Since 2025 started, SOL has shown strength despite the repeated market retraces, holding above key levels, quickly bouncing back, and even hitting its latest all-time high (ATH) of $295 nearly a month ago.

Nonetheless, the most recent controversial launch of a Solana-based token has sent SOL’s price into a three-day pullback.

On Friday, the Viva La Libertad project was announced alongside the Libra token, receiving the endorsement of Argentina’s President Javier Milei.

The project aimed to “encourage Argentina’s economic growth by funding small businesses and startups” and surged to a $4.5 billion market capitalization following the president’s X post.

However, it crashed 94% after the team wallets and insiders sold over $100 million worth of LIBRA at the token’s peak, resulting in President Milei’s distancing from the project.

After the Libra crash, market sentiment shifted, with some community members expressing exhaustion from the numerous memecoin scams launched in the Solana network during the cycle.

As a result, SOL’s price dropped to $190 and hovered within this range until Sunday. As more details of the Libra project came out, Solana dropped another 7.8% to the $180 support zone, sending the price to its lowest valuation in two weeks.

On Monday morning, the cryptocurrency briefly recovered to the $187 level but was rejected from the nearly one-month downtrend resistance line, as trader Crypto Rand noted. To the investor, there is a “Key squeeze over the main $180 support.”

Crypto analyst Ali Martinez highlighted that Solana remained within its key range. The $180 to $190 crucial zone holds the post-election breakout level and has been a significant bounce range for the cryptocurrency over the past four months.

Nonetheless, SOL fell below its key support zone after President Milei retweeted a post about the Libra token on Monday afternoon. The X post explained the steps to invest in the cryptocurrency, briefly sending LIBRA 60% up before retracing 42% after Milei undid his retweet.

Since then, Solana has hovered between the $175 to $178 price range, a 6.6 retrace in the daily timeframe.

Amid SOL’s recent price action, some analysts have pointed out its chart against Ethereum (ETH). According to Daan Crypto Trades, SOL/ETH will be “an interesting chart to watch for the next few weeks.”

The trader explained that SOL interest peaked a month ago when the TRUMP memecoin was launched. The series of “scams, rugs, and grifts” during the weak market has destroyed the “on-chain/meme ecosystem,” which had fueled Solana’s “strong tun-up to that point.”

Daan argues that “capital [is] rotating from SOL to ETH for the first in a while,” which could see the SOL/ETH trading pair retesting the 2021 ATH level at 0.058. This level has been “pretty influential this cycle” and was a key bounce point in Q4 2024.

Meanwhile, Michaël van de Poppe considered the valuation of SOL/ETH has topped after a “massive wick created a massive bearish divergence and valuations start to drop.” As a result, “ETH season starts over SOL season” and rotation from Solana towards Ethereum has started.

The analysts compared the memecoin frenzy to 2020’s DeFi surge, concluding that the SOL “memecoin fiesta has been an inner-circle money printer for a small group, and everybody knows about it now.”