Solana (SOL) has been grappling with significant challenges in recent weeks, from a steep drop in its token price to falling network activity. As the ecosystem braces for upcoming token unlocks, many are left wondering if further declines are on the horizon for one of the most talked-about cryptocurrencies.

Price Drop and Falling Activity

Over the past month, Solana has seen its price tumble from a high of $256 to as low as $173, marking a sharp 32% decrease. This decline is part of a broader bearish trend that has been affecting the cryptocurrency market, but it’s particularly notable for Solana, given its position as one of the top blockchain platforms.

Adding to the concern, Solana’s network activity has taken a hit. The number of active addresses on the Solana blockchain has fallen below its January lows, reaching levels not seen since October 2024. While this is still higher compared to many other periods in the previous year, it signals a notable drop in user engagement and overall trading activity.

Solana’s Token Unlocks: A Major Event Ahead

On March 1, 2025, a significant token unlock event is expected to take place, which could have substantial implications for Solana’s price. As part of the FTX bankruptcy estate’s asset liquidation plan, 11.2 million SOL tokens (worth approximately $1.4 billion) will be unlocked. This unlock follows the collapse of FTX in November 2022, after which the exchange sold 41 million SOL to institutional investors like Galaxy Digital, Pantera Capital, and Figure Markets.

Unlock events like this are typically associated with increased volatility, as a large amount of tokens becomes available for trading, potentially leading to downward pressure on the price. This could exacerbate Solana’s current bearish momentum, making it difficult for the token to regain stability in the short term.

The LIBRA Coin Controversy and Its Impact

In addition to the price drop and upcoming unlocks, Solana’s network has also been affected by recent controversies. One of the most notable issues is the launch of the LIBRA cryptocurrency coin, which was briefly promoted by Argentine President Javier Milei on social media. This event became a scandal, especially after the Cryptocurrency coin’s rug pull, and caused a major stir in the crypto world.

The fallout from this incident has spilled over into Solana’s ecosystem, driving down demand and further reducing network activity. The launch of LIBRA was not the first controversial token on Solana’s chain, but it has certainly been one of the most high-profile, with the CEO of DeFi platform Meteora stepping down amid the scandal.

Solana’s Declining Transaction Fees and Bearish Price Action

Further signs of Solana’s struggles are evident in its transaction fees, which have dropped to their lowest levels since late December. This points to a decline in trading activity and suggests that the network may not be attracting as much use as it once did.

On the price front, the bearish sentiment is also apparent. Solana’s price has fallen below the crucial $180 support level and is trading under the $175 Fibonacci retracement level. The current bearish structure indicates that while a short-term bounce towards $180 or $190 may be possible, the overall trend suggests further declines in the coming days. Many analysts are predicting a drop to $157 or lower, as the market sentiment remains negative.

Long-Term Outlook: Solana’s Resilience

Despite these recent challenges, Solana remains a long-term contender in the crypto space. The blockchain continues to generate daily revenues that are nearly ten times higher than Ethereum’s (ETH), although it still lags behind Ethereum in terms of Total Value Locked (TVL). This indicates that while Solana may be struggling in the short term, its long-term fundamentals remain strong.

Solana has proven its ability to recover in the past, and with continued development and innovation, it could find its footing again. However, for now, the focus remains on how it will navigate these immediate challenges—particularly the upcoming token unlocks and continued pressure on network activity.

Conclusion: What’s Next for Solana?

As Solana faces a combination of falling network activity, upcoming token unlocks, and bearish price action, the short-term outlook seems uncertain. The large token unlock event on March 1, 2025, could trigger further volatility, and the network’s ongoing controversies have left a mark on its reputation. Despite these factors, Solana’s long-term potential remains intact, though it may need to weather some turbulence before it can stage a full recovery.

Traders and investors should keep a close eye on Solana’s price levels, especially the critical $180 support zone, as any further breakdown could lead to lower price points.