SOL Experiences a Sharp 150% Drop: Uncovering the Causes Behind the Solana Community's Panic

The (SOL) token experienced a dramatic drop of around 150% from late 2024 to early 2025, igniting heated discussions among market participants and experts. Although the price briefly climbed back above $135 at the end of 2025, the overall ecosystem continues to face challenges from a mix of technical, market, and structural issues. This report explores the causes behind the panic—including token unlocks and declining network engagement—and considers whether the downturn signals a deeper systemic threat or presents a potential buying window for contrarian investors.

Market Sentiment: A Cascade of Fear and Selling

The sharp decline in February 2025, which saw

hit a yearly low of $137.77, was triggered by a planned token unlock on March 1, 2025. This event —worth between $1 and $2 billion—into circulation, immediately increasing selling pressure. Additional, smaller unlocks in April and May intensified the negative mood, as across 28 wallets further flooded the market.

Wider market turbulence made the situation worse. The failure of the LIBRA token and the Bybit security breach—in which Solana memecoins were used to move $1.4 billion—

. At the same time, Polymarket data showed only a 1% chance that SOL would reach $300 by November 2025, . The November 2025 downturn, which drove prices down to $132 during a broader crypto slump, was made worse by “extreme fear” on the Crypto Fear and Greed Index and from leveraged traders.

Network Fundamentals: Contradictory Signals as Activity Drops

On-chain data reveals a complex situation. Solana’s DeFi TVL reached $10 billion by the end of 2025, but

—the lowest in a year—from a high of 9 million in January 2025. This drop points to fading enthusiasm for tokens, which had previously fueled much of the network’s activity in late 2024. Decentralized exchange (DEX) volumes have also stagnated since the third quarter of 2025, and the average FDV-to-revenue ratio has narrowed, in light of slower growth.

Still, there are signs of strength. Projects like Ore have shown that strong fundamentals can align with price performance, thanks to their net-negative emission-to-buyback approach. Furthermore, institutional moves—such as SoFi Bank’s adoption of Solana and Coinbase’s purchase of the on-chain trading platform Vector—point to ongoing infrastructure progress.

Systemic Threat or Buying Opportunity: The Ongoing Struggle

The $80 billion market capitalization mark has become a crucial area of contention.

could set the stage for a rally toward $1,000 within three to six months, while a breakdown could see prices fall back to $100 or even lower. Despite a bearish head-and-shoulders pattern emerging on the charts, , amassing $351 million in assets. This institutional interest stands in contrast to the 17-day inflow streak in November 2025, which during the broader selloff.

The central issue is whether the current price is an overreaction. While network participation and DEX activity remain subdued, ETF inflows and infrastructure investments indicate persistent demand. For example, Jupiter, Kamino, and

continue to support DeFi TVL expansion, and Coinbase’s acquisition of Vector could enhance on-chain accessibility.

Conclusion: Cautious Optimism for Long-Term Stability

Solana’s 150% decline is the result of both technical selling and widespread market anxiety. Nevertheless, the ecosystem’s growing institutional involvement, ETF inflows, and innovative projects—like Ore’s buyback system—suggest a possible price floor. Investors must balance the risks of further unlocks and forced sales against the chance of a recovery if resistance levels such as $142–$145 are surpassed. At present, the market seems to be consolidating, with the $80 billion cap acting as a pivotal point. While a surge to $1,000 is still uncertain, the current price could present an opportunity for those prepared to withstand ongoing volatility.