Solana (SOL) price drops over 57% from its highest level this year, with further downside likely.

Solana (SOL) dropped to $126.5 on March 20, bringing its market cap to $64.45 billion — down from over $100 billion just a few months ago

Solana’s price has fallen sharply over the past few months, and the coin now remains in a bear market after dropping over 57% from its highest level this year. However, further downside is likely.

Solana is currently trading at $126.5, with a market cap of $64.45 billion. At its peak earlier this year, Solana’s market cap was over $127 billion. Since then, about $63 billion has been wiped out.

This crash is being driven by major challenges within the Solana ecosystem, which have led to a collapse in its meme coin market. Earlier this year, the total market cap of Solana-based meme coins was over $25 billion. However, at the beginning of the week, only Official Trump (TRUMP) had a market cap of over $1 billion.

The decline in meme coin market cap has also led to a decrease in the trading volume handled by Solana-based decentralized exchanges (DEXs), such as Raydium, Orca, and Meteora. According to DeFi Llama, volume on these platforms decreased by over 34% in the last seven days to $8.3 billion.

In contrast, DEX protocols on the BSC network handled $14.2 billion in volume during the same period, while Ethereum DEXs processed $9.65 billion. Over the last 30 days, Solana’s DEX protocols handled $61 billion in volume, compared to Ethereum’s $78 billion.

This marks a major reversal, as Solana had been the most active chain for DEX trading since October last year. The decrease in volume has also impacted network revenue. Data from Token Terminal shows that Solana generated $21.2 million in revenue this month, compared to $90 million last month and a peak of $258 million in January.

Solana price technical analysis

The daily chart shows that SOL has been in a strong downward trend over the past few months. It plunged from a high of $295 in February to a low of $126 as challenges within its ecosystem intensified.

Solana formed a death cross pattern as the 50-day and 200-day moving averages crossed each other on March 3. The coin is now forming a pennant pattern, which is made up of a long vertical line and a rectangle pattern. This pattern usually results in a strong bearish breakdown.

The pennant is developing at a critical support level that Solana has struggled to break below since April last year. A confirmed breakdown below this level could trigger further losses, with the next target around $100, approximately 25% below the current price.