Why Solana, XRP, Dogecoin and BNB are crashing?

Solana (SOL), XRP, Dogecoin (DOGE) and Binance Coin (BNB) decline on Tuesday. Top altcoins ranked by market capitalization are in a downward trend, even though Bitcoin (BTC) continues to consolidate around the $95,000 level. 

Recent events, such as the LIBRA and MELANIA meme token scandals and the alleged links to wallet addresses that pulled over $100 million from the latter, have negatively impacted trader sentiment. 

Solana, XRP, Dogecoin, BNB price declines

At the time of writing on Tuesday, Solana, XRP, Dogecoin and BNB correct 5.31%, 2.97%, 2.59% and 2.59% on the day, respectively. The four meme coins rank among the top 10 cryptocurrencies by market capitalization. 

Nick Forster, Founder at Derive.xyz, told FXStreet that token unlock is a key market mover influencing Solana price. Forster said,

“In contrast, Solana faces a $2 billion unlock in 12 days, representing nearly 2% of the token's fully diluted value (FDV), which is expected to put downward pressure on its price. Alongside ongoing negative sentiment surrounding meme coins, Solana could face a difficult few weeks ahead. We’re seeing a 10% chance SOL settles above $280 by the end of the quarter, and a 20% chance it will reach below $170 by the same date.”

In the case of Dogecoin and XRP, on-chain data signals further correction in the altcoin prices. 

The Market Value to Realized Value (MVRV) ratio of Dogecoin in a 30-day timeframe shows that every time MVRV drops under 7%, there is a significant corresponding correction in price. At the time of writing on Tuesday, MVRV is 15%, suggesting Dogecoin’s price could decline further if the pattern repeats itself.   

Dogecoin on-chain analysis | Source: Santiment 

XRP on-chain analysis shows that active addresses in the 24-hour timeframe are in a downtrend. The funding rate aggregated by XRP, as seen on Santiment, has been negative on several days between January 27 and February 17. 

Negative spikes mean that derivatives traders are bearish on the XRP price and expect further decline.  

XRP on-chain analysis | Source: Santiment 

The developments surrounding the entities behind LIBRA, promoted by Argentina’s President Javier Milei, and the MELANIA token have shrouded the Solana blockchain in controversy. This has also negatively influenced sentiment among traders, as evidenced by the Crypto Fear & Greed Index, which is now at a neutral level after “extreme greed” last month. 

Crypto Fear & Greed Index | Source: Alternativeme