Solana price dropped below an important support level as cryptocurrencies recoiled. SOL fell to a low of $29.95, which was its lowest level since June 19th of this year. It has crashed by more than 80% this year, bringing its total market cap to about $10.5 billion. So, what next for Solana?
Solana is one of the biggest players in the blockchain industry. It is a leading smart contract platform that makes it possible for people to build decentralized applications (dApps).
It has been used by some of the biggest developers in the world. Examples of popular projects in its ecosystem are Solend, Marinade Finance, Lido, and Raydium. Its top web3 projects are StepN and Audius.
Solana price has been in a downward trend this year for three main reasons. First, this decline is in line with the performance of other cryptocurrencies like Bitcoin, Ethereum, and Cardano. It is also in sync with that of global stocks since popular indices like Nasdaq 100 and S&P 500 have all dropped by more than 20% this year.
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These declines are because of the changing macro and fiscal situations in the US. The Fed has delivered several rate hikes this year while Congress has not provided stimulus checks. Inflation has also risen to the highest point in more than 40 years.
Second, Solana price has plunged because of the weakening fundamentals. Its DeFi total value locked (TVL) has crashed from more than $10 billion to about $1.18 billion. Solend has a market dominance of 34%. Similarly, its NFT trading volume has dropped. Its monthly volume peaked at $299 million in January and then plunged to $129 million in September.
Finally, there are concerns about the regular outages in Solana’s ecosystems. Solana has had several outages this year, which has led to some questions about its future.
The daily charts shows that SOL price has dropped from an all-time high of $265 to the current $25. Along the way, the coin has dropped below all moving averages. It is slightly above the important support level at $25.98, which was the lowest level on June 14.
The coin has moved below the Supertrend indicator while the Relative Strength Index (RSI) has moved below the neutral point. Therefore, the coin will likely continue falling as sellers target the next support at $25.
