Solana Price Crashes 15% Today as Active Users, Core Developers Flee

Solana price crashed by 15% on Tuesday as the recent meltdown continued. This plunge coincided with the weak ecosystem metrics, which show that its active users, core developers, commits, and DEX volume have dropped. So, will the SOL price rebound as it becomes highly oversold?

Solana Price Plunges as Active Users, Core Developers are Fleeing

SOL price has crashed as its ecosystem woes continue. Its meme coin market cap has dropped from over $25 billion in January to $8.3 billion. 

This performance has pushed more users to flee the network. TokenTerminal data shows that Solana’s active users have fallen to 17.8 million, down from 37 million in November last year. 

Additional data reveals that the number of developers building on the Solana ecosystem has also retreated. There are now 24 core developers, down from 86 in August last year. The same trend is happening in terms of code commits, which have fallen to a multi-month low of 32.

Solana’s ecosystem is facing more headwinds as the daily fees have crashed to about $1 million. That is a big drop since it had a year-to-date high fee metric of $44 million in January following the Official Trump meme coin launch. 

Solana price has also crashed as the volume handled by its DEX networks dropped. These protocols like Raydium and Orca handled $17 billion worth of volume in the last seven days, a 30% decline. This performance may continue as demand for Solana meme coins drop following numerous rug pull scams.

Binance Selling SOL Ahead of Token Unlock

There are other factors driving the Solana price crash. Data shows that Binance may be dumping its Solana holdings through Wintermute. Online users noted that Wintermute, an OTC platform, withdrew $40 million worth of tokens from Binance. 

This withdrawal happened as Solana prepared a 11.2 million token unlock on March 1. A big token unlock is seen as being highly dilutive of existing holders. 

SOL Price Gets Oversold: Can it Recover?

The daily chart reveals that the value of SOL has crashed from near $300 in January to $140 today. It has dropped below the important support level at $170, the neckline of the double-top-like pattern at $263. A double-top often leads to a strong bearish breakdown.

Solana is also about to form a death cross pattern as the spread between the 50-day and 200-day moving averages narrow. That cross often leads to a big drop of an asset.

On the positive side, Solana price has become highly oversold, with the Relative Strength Index moving to 24. It dropped to that level lastly in July 2023 and then rebounded. The same happened with the percentage price oscillator, which dropped to minus 8,57, a level it moved lastly on the same date.

Solana Price Targets

Solana’s outlook is bearish, especially as the death cross pattern nears. That may see it drop to the psychological point at $100. 

The alternative scenario is where it forms a break-and-retest pattern by moving back to the resistance at $170. A break and retest is usually a sign of continuation. The bearish view will become invalid as Solana price rises above $170.