Solana Price Analysis: SOL transactions down 60% amid LIBRA meme controversy with Argentine President Milei

Solana price declined 4% on Friday after failing to stage a breakout above the $180 resistance level amid the LIBRA memecoin controversy involving Argentine President Javier Milei. With network activity in decline, SOL price remains at risk of further downside.

Solana hits major resistance at $180 amid altcoin ETF hype

Solana (SOL) has benefited from positive sentiment surrounding the prospects of altcoin ETF approvals this week. As the US Securities & Exchange Commission (SEC) confirmed applications for Litecoin (LTC) and XRP spot ETFs, SOL price surged 9%, only to hit a major sell wall at the $180 resistance level on Thursday.

Solana Price Action (SOL/USDT) 

SOL price action earlier this week reflects traders reacting to broader market optimism surrounding the SEC, but technical barriers have proven difficult to break.

The SOL/USDT chart illustrates a sharp 4% retracement, bringing the price down to $168 at press time on Monday.

While bullish catalysts such as ETF speculation provide upward momentum, countervailing bearish forces have stalled SOL’s rally.

Solana network transactions declined 60% amid LIBRA memecoin rug pull

Solana's price movement this week has lagged behind other top altcoins like Litecoin and XRP, signaling the presence of strong bearish catalysts.

Market reports indicate that the LIBRA memecoin controversy involving Argentina’s president has been a key factor behind SOL’s underwhelming performance.

The LIBRA memecoin, hosted on the Solana blockchain, was promoted by figures linked to Argentina’s political elite before suffering an abrupt rug pull.

Investors suffered major losses just days after President Milei had directly endorsed the project on social media.

The scandal has ignited controversy, leading to calls for his impeachment and raising concerns over the integrity of political involvement in cryptocurrency markets.

This has severely eroded trust within the Solana memecoin sector.

Solana Network Transactions, Feb 21, 2025 | Source: HelloMoon.io

Until recently, Solana had been a dominant force in the memecoin industry, with viral projects such as Pudgy Penguins, Official Trump, and Fartcoin (FART) each reaching unicorn status with $1 billion market capitalizations in the last two months.

However, the LIBRA debacle has now cast doubt on the credibility of Solana-hosted memecoins.

On-chain data from HelloMoon reveals the scale of the fallout. Solana network transactions plummeted by 60% this week, dropping from 58.9 million SOL on February 14 to just 24.8 million SOL on Thursday. The sharp decline signals a shift in trader sentiment as market participants exercise greater caution in the aftermath of the scandal.

The controversy surrounding the LIBRA memecoin has momentarily halted the memecoin frenzy on Solana.

With network activity declining sharply, demand for SOL as a transactional asset has weakened. If this trend persists, SOL’s price could face renewed selling pressure in the days ahead, particularly if investors pivot toward alternative blockchain ecosystems perceived as more stable and less susceptible to high-profile controversies.

Solana price forecast: Bears could target $160 reversal next

Solana price forecast remains cautious as SOL struggles to hold support near $168, with key indicators flashing bearish warnings.

The daily chart shows a rejection at the middle Bollinger Band ($191), signaling strong overhead resistance.

The latest price action confirms a descending structure, with SOL down 22% from its February high before staging a modest 11.3% rebound.

The lower Bollinger Band ($165.79) is now acting as short-term support, but failure to hold above this level could accelerate the decline toward the psychological $160 mark.

More so, the Moving Average Convergence Divergence (MACD) remains in negative territory at -2.53, with both the signal line (-9.51) and MACD line (-12.04) diverging further, indicating that bearish momentum is yet to subside.

If selling pressure persists, SOL risks extending its drawdown below $165.

However, should buyers defend this critical level, a potential relief rally could aim for $180, where a cluster of resistance from the previous sell-off remains firm. A break above $191 would be required to confirm a bullish reversal.