Solana Plummets to 2024 Lows; AMM Launch Hopes to Reverse Trend

Solana's price has taken a significant hit, plummeting to its lowest level since November 2024. This decline has erased the gains the cryptocurrency experienced following the Trump election hype. Market analysts predict a potential further downside to $100, but there are developments that could counter this decline.

Pump.fun, a Solana-based decentralized exchange (DEX), is reportedly preparing to launch a new automated market maker (AMM). The goal is to increase network usage and trading volume, which could help balance out the price decline. This AMM would allow users to trade crypto directly against pools of funds in smart contracts, eliminating the need for a middleman.

From a technical perspective, Solana's Relative Strength Index (RSI) has slipped into oversold territory. This often suggests that prices might not fall much further. Traders are keeping a close watch on the $160 support level. On the upside, $194 is the key resistance point, making short-term profit-taking a smart move if the price bounces back. However, if Solana breaks below $144, we could see even bigger losses. Currently, the risk-reward ratio is sitting at 1:2.

Adding to the worry, Solana has a token unlock scheduled for March 1st. These unlocks can flood the market with more tokens, often leading to selling pressure. Historically, token unlocks have made prices jumpy, and everyone's watching to see how Solana's supply will react this time.

Despite the gloomy price outlook, some traders think this downturn is planned—a clever tactic by big investors ("whales") to buy up more Solana before major positive news, like a possible Solana ETF approval. With big holders selling off and smaller investors hesitating, the next few days are make-or-break for Solana. We'll soon see if SOL bounces back or keeps falling to lower support levels.