Solana Stablecoins Double To $11.4B, But SOL Risks Drop To $138!

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  • Solana’s stablecoin market cap surged from $5.1B to $11.4B in Jan.
  • Analysts warn SOL price could drop to $138 if it fails to hold $191 support.
  • The recent sell-off has seen SOL fall 33% from its all-time high of $293.

Solana stablecoin market cap surged in Jan., doubling from $5.1 Billion to $11.4 Billion, driven by memecoin trading and increased USDC issuance. Meanwhile, SOL price faces pressure, with analysts warning of a potential drop to $138.

Solana Crypto Stablecoin Market Cap Doubles in January

The total value of stablecoins on the Solana crypto blockchain more than doubled in Jan., jumping from $5.1 Billion to $11.4 Billion, according to DefiLlama data.

An influx of memecoin trading primarily fueled this surge, as Solana continued to attract speculative traders due to its low fees and fast transactions.

Solana’s stablecoin TVL surged past $11B in Jan
Solana’s stablecoin TVL surged past $11B in Jan | Source: DefiLlama

The trend accelerated after former U.S. President Donald Trump launched his Solana-based token on Jan. 18, followed by a MELANIA token named after the former first lady. According to CCData, Solana’s stablecoin supply has increased by over 73% since mid-Jan., reinforcing its growing dominance in the sector.

USDC Dominates Solana’s Stablecoin Market

Circle’s USDC accounts for nearly 80% of all stablecoins on Solana crypto, holding a total value of $9.25 billion.

Blockchain data shows Circle has been ramping up USDC issuance, minting an additional $250 Million on Feb. 3, bringing its weekly total to $1.25 Billion.

solana
Circle minted $2.25B in USDC over 12 days | Source: Solscan

Meanwhile, Tether (USDT) remains the world’s most traded stablecoin with a $139.5 billion market cap, but its presence on Solana is limited compared to Ethereum and Tron. Circle’s USDC has outpaced all stablecoins in 2024, recording a 78% annual growth rate.

While Tether faces regulatory challenges in the European Union due to Markets in Crypto-Assets (MiCA) regulations, Circle continues to expand its presence on Solana, benefiting from increased stablecoin adoption on the network.

SOL Price Faces Potential Drop to $138

Despite Solana’s stablecoin surge, SOL price has dropped 33% from its all-time high of $293 set two weeks ago. The ongoing crypto market correction has led to over $2 Billion in forced liquidations, with SOL falling 8.88% in the past month.

Ali Charts warns of Solana's drop to $138
Ali Charts warns of Solana’s drop to $138 | Source: X

At the time of writing, SOL trades at $196 after a 7% drop in the past 24 hours, with over $85 Millionn in forced liquidations—mostly affecting long traders.

According to crypto analyst Ali Martinez, if SOL fails to hold above $191, a drop to $138 could be imminent.

From a technical analysis perspective, SOL has been forming a bullish continuation pattern since November.

However, the recent downturn has brought the price back to the 50-week moving average, which has acted as a major support level.

If Solana crypto holds above $191, it could rebound in the coming weeks. However, if selling pressure intensifies, SOL could slide toward $138, a level that could serve as the next major support zone.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.

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