Crypto Market Sees Declines Amid Tariff Announcements and Regulatory Developments

The cryptocurrency market is experiencing significant fluctuations, with major players like Solana (SOL) and XRP facing nearly 10% declines in prices over the past week. This drop comes on the heels of key tariff announcements made by U.S. President Donald Trump, alongside a notable decline in Bitcoin prices, which have acted as a catalyst for losses across the board in the altcoin sector.

Solana Ecosystem Metrics and Growth

Recent on-chain metrics indicate a downturn in engagement within the Solana ecosystem. According to data from TheBlock, the 7-day moving average of active addresses on the Solana network is on a downward spiral, reflecting a decline in user engagement. With fewer active addresses, there is a potential for reduced fees collected and an overall decrease in protocol revenue.

Moreover, new addresses on the Solana blockchain are also declining, which highlights diminishing participation from traders. This trend, coupled with a notable 16% decrease in the total value locked (TVL) from its January peak of $12.1 billion to the current $10.227 billion, signals Solana’s struggles to maintain its position in an increasingly competitive blockchain landscape. Notably, despite this drop, Solana’s TVL remains above the average levels observed earlier this year.

Data from Santiment reveals that both open interest and volume in Solana derivatives are decreasing, with funding rates swinging between negative and positive, suggesting that derivatives traders remain unsure about Solana’s future pricing direction.

XRP Ecosystem Updates: Lawsuit and Trump Effect

XRP has not been exempt from the bearish tone, with its price plummeting 16% over the past week, as reported by TradingView. This decline is largely attributed to the wider market correction initiated by Bitcoin’s downturn, compounded by apprehensions over rising inflation fueled by President Trump’s recent tariff announcements on trade with key allies and competitors, including Canada, Mexico, and China.

Ripple’s Chief Technology Officer, Stuart Alderoty, expressed confidence in the potential benefits of Trump’s new crypto task force under SEC commissioner Hester Peirce. Alderoty believes this could help facilitate a resolution to the ongoing lawsuit with the SEC, potentially leading to more favorable regulatory conditions for Ripple and the broader market.

Traders are closely monitoring these developments, as the overall outlook for XRP remains negative amidst the uncertain market environment.

Solana and XRP Derivatives and On-Chain Analysis

The derivatives market has seen significant activity, with Coinglass reporting over $332 million in liquidations within the last 24 hours. Solana derivatives suffered particularly, with over $11 million in bullish positions wiped out as the market adjusted to the sudden price declines.

Similarly, XRP experienced a notable liquidation of over $14 million in derivatives positions, reflecting the overall pessimism pervading the market. Open interest and traded volumes across both cryptocurrencies have mirrored one another’s deteriorating trend, leading to growing bearish sentiment among traders.

Technical Analysis and Price Targets for SOL and XRP

In the technical landscape, Solana appears to be in a consolidation phase near crucial support levels above $200. Analysts suggest that SOL may find support between $190.11 and $198.47, with resistance noted at $218.90. Nevertheless, indicators such as the relative strength index (RSI) and moving average convergence/divergence (MACD) indicate a bearish trend continuing for SOL.

XRP, too, is approaching key support at $2.3699, with technical indicators mirroring the downward momentum exhibited by Solana. The bearish sentiment in the derivatives market reveals that traders are exercising caution with both XRP and Solana as they navigate the uncertain market conditions.

Expert Commentary on Solana’s Meme Coins and Altcoin ETFs

Despite recent market setbacks, experts remain optimistic about the potential growth of both Solana and XRP. Experts like Tim Ogilvie, Global Head of Institutional at Kraken, believe that meme coins could capitalize on trending narratives, enhancing engagement within the Solana ecosystem—a sentiment echoed amid the arrival of recent meme tokens linked to Trump.

Furthermore, Nick Forster, founder of Derive.xyz, emphasizes the possibility of altcoin ETF approvals in 2025, with several major players actively filing for Spot ETFs for assets like DOGE, SOL, XRP, and LTC. An approval could signal increased legitimacy for the digital asset industry and potentially attract significant capital inflows.

Conclusion

As the cryptocurrency market adjusts to recent developments, traders will need to keep a close eye on external factors including regulatory changes and economic shifts. The ongoing declines in Solana and XRP highlight a critical juncture for the altcoin market, necessitating careful consideration of future opportunities and risks.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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