Solana's SOL Coin Faces Bearish Storm Amid Memecoin Scandals

Solana's native SOL coin is facing increased bearish sentiment as traders position for a potential downturn amid a series of scandals involving memecoins on the network. According to data from Coinalyze, the ratio of long to short SOL positions on cryptocurrency futures exchanges dropped from 4 to 2.5 on Feb. 17, indicating a marketwide tilt toward bearishness on SOL.

Tyler Durden, a pseudonymous cryptocurrency influencer, noted on Feb. 17 that the market has decided to express its anger at Solana. Citing figures from Binance's perpetual futures trading platform, Durden said that the ratio of short to long positions had risen to 4-to-1, indicating an overbalance of bearish bets.

The price of SOL is down nearly 6% on the day as of the time of publication, according to CoinGecko. Meanwhile, shorts outweigh longs on Binance, further indicating a bearish sentiment.

The sudden rise of memecoins such as Bonk (BONK) and Dogwifhat (WIF) drew billions of dollars into the Solana ecosystem. Both dog-themed memecoins topped $4 billion in market capitalization before retracing in December and January, according to data from CoinGecko. However, insider selling and huge losses for retail are now souring sentiment on Solana's memecoin ecosystem.

On Feb. 14, Libra (LIBRA), a cryptocurrency seemingly endorsed by Argentine President Javier Milei, erased some $4.4 billion in market capitalization within hours of launching. Milei initially promoted the coin on X but has since deleted his post and is now facing lawsuits in Argentina for allegedly misleading investors.

Since January, traders have lost approximately $2 billion across 800,000 wallets on Official Trump (TRUMP), US President Donald Trump's official memecoin. The fully diluted value of TRUMP is down roughly 75% from highs of more than $70 billion to around $17 billion as of Feb. 17, according to CoinGecko. Roughly 80% of TRUMP's supply is held by insiders.

Despite the memecoin trading slowdown, Solana continues to outperform Ethereum, the largest layer-1 network by total value