SOL Value Decreased by 13% This Week Following Milei Meme Coin Rugpull: What’s Next?

Solana (SOL) experienced a 13% decline this week, trading at $173.52, following the repercussions of Argentine President Javier Milei’s involvement in the $LIBRA meme coin controversy. This incident, referred to as “Cryptogate” in Argentina, has initiated a corruption investigation into Milei, who endorsed $LIBRA as a tool for economic advancement.

The value of the coin briefly soared to a $4 billion market capitalization before plummeting as early investors sold off, leading to allegations of a “rug pull.”

Milei removed his promotional message following the price drop and distanced himself from the initiative. However, he now faces legal scrutiny for possible fraud, bribery, and abuse of power.

This controversy has raised concerns regarding the regulation and stability of meme coins, affecting investor sentiment across the cryptocurrency market, including Solana.

It all began with this post at 5:01 PM ET from Javier Milei.
As observed during President Trump’s memecoin launch, the initial hour was filled with speculation:
Was this a hack or a legitimate launch?
It turned out to be genuine as several other Argentinian politicians shared the news. pic.twitter.com/cL0ZQgxtCB

— The Kobeissi Letter (@KobeissiLetter) February 15, 2025

Key Aspects of the $LIBRA Scandal:

• Market Manipulation: The price of $LIBRA surged before its decline, indicating potential market manipulation.
• Legal Consequences: Milei is facing accusations of fraud, bribery, and abuse of power.
• Investor Sentiment: The scandal has diminished investor confidence in meme coins and the wider cryptocurrency market.

Solana (SOL) Experiences Bearish Momentum Amid Market Instability

Solana’s bearish trend has intensified as it struggles to surpass the descending trendline, indicating ongoing selling pressure. The 50-Day Exponential Moving Average (EMA) at $179.15 is acting as significant resistance, hindering any recovery.

SOL Key Resistance Levels:

• Immediate Resistance: $180.48 – A breakout above this level could trigger buying interest.
• Subsequent Resistance: $191.39 and $206.01 – Clearing these levels may shift sentiment to bullish.

SOL Key Support Levels:

• Immediate Support: $161.32 – A drop below this level could accelerate the bearish trend.
• Subsequent Support: $149.24 and $136.25 – These are crucial support zones that could prevent a deeper decline.

The descending trendline and the 50 EMA reinforce the bearish outlook, suggesting that Solana may continue to face challenges until it breaks above $180.48.

Impact on Meme Coins and the Broader Cryptocurrency Market

The $LIBRA scandal has influenced investor sentiment towards meme coins and the overall cryptocurrency market. Meme coins, known for their speculative nature, have faced criticism for benefiting insiders at the expense of retail investors. This controversy has heightened skepticism and led to increased caution among traders.

Regulatory Concerns and Future Implications:

• Increased Scrutiny: The scandal has raised concerns about regulatory oversight and transparency in the global cryptocurrency market.
• Potential Regulation: Analysts caution that the controversy may lead to stricter regulations for meme coins and speculative digital assets.
• Market Volatility: Despite negative sentiment, meme coins are likely to persist due to their potential for high returns.

SOL Outlook and Conclusion

Solana remains bearish below $180.48 and the 50 EMA at $179.15. If prices do not break above these levels, the bearish trend is likely to continue, targeting support at $161.32. However, a decisive breakout above $180.48 could reverse the bearish trend, propelling Solana towards $191.39.

Key Insights:

• Bearish Momentum Below $180.48: Solana is bearish under $180.48, with the 50 EMA serving as strong resistance.
• Key Support Levels: Immediate support at $161.32, with the next support at $149.24.
• Breakout Potential: A breakout above $180.48 could drive Solana towards $191.39, reversing the bearish trend.

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