Since yesterday, Solana (SOL) has hit a bearish run in the past week, shaving off about 5% and billions of dollars in market value. The coin was traded for $170 as of June 6 and gained immensely in the previous 12 months. But the Solana price slumped as low as $123.42 on Monday.

A Steep Decline

SOL has declined by at least 11% in the past week, coinciding with the general slump in the value of crypto assets amid negative investor sentiment across the cryptocurrency market.

Mert Mumtaz, the co-founder and CEO of infrastructure startup Helius Labs, hinted that the headwind might continue this week. He claimed to have offloaded all his crypto holdings because "crypto is over."

Solana's steep decline can be attributed to market-wide factors and specific cryptocurrency challenges. In addition, Solana—typically known for its high throughput and low transaction fees—has been facing network outages and competition from other blockchain platforms.

Memecoin Impact

While Solana has shown in the past that it could rebound, recent memecoin trading has pulled it in both directions, said Andrew Kang, a co-founder of Mechanism Capital, a crypto-focused investment firm.

Many celebrities have recently lent their branding names to new memecoins flooding the market. At least 500,000 memecoins were launched in May alone. Kang predicted Solana might plummet to $80 " if meme trading pauses for the next few months."

For Solana, the beginning of the end of memecoin mania might have come after right-wing internet personality Andrew Tate threatened to "CRASH THE SOLANA NETWORK."

Tate claimed to have burned over $38 million worth of Solana-based memecoin TOP G, effectively removing 58% of its supply and causing its price to surge by over 130%. Despite the substantial burn, which left TOP G's market cap at over $65 million, Tate claimed he profited nothing from the action.

Broader Market Pressure

Furthermore, the broader financial markets have also been under pressure, with major indices like the S&P 500 seeing declines. Memecoin activity has notably spiked trading volume on Solana.

According to data from DeFi Llama, Solana's trading volume surged recently, primarily driven by the explosive interest in memecoins like TOP G, Tate's DADDY, and Australian rapper Iggy Azalea's MOTHER.

Still, Kang said negative exchange-traded fund (ETF) inflow and poor macro data from preceding weeks contributed to the plunge.

Legal Risks for Celebrities Promoting Memecoins

The surge in memecoin activity has also raised legal concerns, particularly for celebrities promoting these tokens. While memecoins can bring significant attention and financial gains, they also come with major legal pitfalls.

Celebrities may face substantial civil and criminal liabilities if their actions are perceived as market manipulation or if they make false or misleading claims about the tokens they endorse.