Why is Solana (SOL) price down today?

Solana price is down today after this week’s sharp crypto market sell-off stands as the primary culprit in SOL’s price correction. Altcoin Watch Own this piece of crypto history Collect this article as NFT Join us on social networks Solana (SOL), the native cryptocurrency of the Solana network, has dropped over 15% in the last 48 hours to reach a low of $121 on July 1. SOL’s weekly losses stand around 10% and 23% in the 30-day timeframe.SOL/USD daily chart. Source: TradingViewSOL’s performance over the last day has been accompanied by a leap in its trading volume, which has increased by 42% to $6.4 billion, asserting the intensity of the sell-side activity. This decrease in price and high trading activity have seen its total market capitalization drop to $61.45 billion, but according to data from CoinMarketCap, SOL still maintains its position as the fifth largest cryptocurrency.Let’s look at the top catalysts driving SOL’s price lower.Bearish sentiment dominates the wider crypto marketThe drawdown in SOL’s price over the last few days is largely attributed to the negative sentiment in the broader crypto market led by intensified Bitcoin (BTC) selling by the German government and expected repayments by the defunct crypto exchange Mt. Gox. The German government has transferred more than 3,000 BTC to multiple exchanges over the last two weeks, adding to Bitcoin’s sell pressure. On June 5, Mt. Gox added to the pressure, transferring 47,229 BTC, worth around $2.6 billion, to a new address in its first major move since May, according to data from blockchain tracker Arkham.Source: ArkhamSentiment toward crypto has also hit its lowest point since January 2023. On July 5, the Crypto Fear and Greed Index scored 29 out of 100, showing that the market is experiencing peak “fear.”Crypto Fear and Greed Index. Source: Alternative.meThis fear has led to a risk-off mode among investors, explaining the ongoing correction in crypto prices, including SOL.Decreasing activity on the Solana networkThe Solana network has grown tremendously over the last year, shaking off the effects of the FTX collapse. High developer activity characterized by airdrops led to the launch of many projects, including successful memecoins like BONK and Dogwifhat (WIF). The blockchain’s total value locked (TVL) has increased by 8,800% since November 2023. However, SOL’s latest price drop follows a decrease in onchain activity, as fewer users engage with the network, contributing to the decreasing momentum.Data from DefiLlama reveals the TVL on the Solana network has decreased by 17% from $4.98 billion on June 5 to $4.11 billion on July 5, suggesting that users and developers are interacting less with the network.Total value locked on BNB Chain. Source: DefiLlamaData from DappRaddar showed that in a comparison of blockchains by monthly network activity, Solana emerged as the clear leader, with 352 million transactions over the past month—dwarfing Ethereum’s 6.97 million and BNB Chain’s 18.9 million.However, additional data revealed that Solana’s DApp volume has decreased by 29% over the last 30 days. Currently, Solana’s 30-day DApp volume stands at $3.52 billion, which is far below that of the Ethereum blockchain ($201.91 billion) and the Tron network ($26.69 billion). Notably, the NFT volume decreased by 46.5% over the same period.Layer-1 blockchains ranked by monthly activity. Source: DappRadarThis data indicates a drop in NFT trading and staking, significantly impacting the volume decrease. Moreover, token trading on the blockchain trended lower over the month, adding to the bearish sentiment.Related: Price analysis 7/5: BTC, ETH, BNB, SOL, XRP, DOGE, TON, ADA, AVAX, SHIBSOL price is in a technical correctionFrom a technical standpoint, SOL's price decline is part of an extended technical correction that started on March 18, when it turned away from its multi-year high of $209. The SOL/USD pair has dropped by over 32% since.SOL/USD daily chart. Source: TradingViewAs of July 5, SOL was testing its multi-month horizontal support line of a descending triangle for a potential rebound toward the descending trendline at around $150—up 11% from the current price levels.Conversely, a break below the horizontal support line risks a decline toward the technical target of the descending triangle at $74. Such a move would represent a 45% decline from the current price.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. Add reaction Adblock test (Why?)

Jul 6, 2024 - 00:43
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Why is Solana (SOL) price down today?

Solana price is down today after this week’s sharp crypto market sell-off stands as the primary culprit in SOL’s price correction.

Why is Solana (SOL) price down today?

Own this piece of crypto history Collect this article as NFT

Join us on social networks

Solana (SOL), the native cryptocurrency of the Solana network, has dropped over 15% in the last 48 hours to reach a low of $121 on July 1. SOL’s weekly losses stand around 10% and 23% in the 30-day timeframe.

SOL/USD daily chart. Source: TradingView

SOL’s performance over the last day has been accompanied by a leap in its trading volume, which has increased by 42% to $6.4 billion, asserting the intensity of the sell-side activity. This decrease in price and high trading activity have seen its total market capitalization drop to $61.45 billion, but according to data from CoinMarketCap, SOL still maintains its position as the fifth largest cryptocurrency.

Let’s look at the top catalysts driving SOL’s price lower.

Bearish sentiment dominates the wider crypto market

The drawdown in SOL’s price over the last few days is largely attributed to the negative sentiment in the broader crypto market led by intensified Bitcoin (BTC) selling by the German government and expected repayments by the defunct crypto exchange Mt. Gox.

The German government has transferred more than 3,000 BTC to multiple exchanges over the last two weeks, adding to Bitcoin’s sell pressure.

On June 5, Mt. Gox added to the pressure, transferring 47,229 BTC, worth around $2.6 billion, to a new address in its first major move since May, according to data from blockchain tracker Arkham.

Source: Arkham

Sentiment toward crypto has also hit its lowest point since January 2023. On July 5, the Crypto Fear and Greed Index scored 29 out of 100, showing that the market is experiencing peak “fear.”

Crypto Fear and Greed Index. Source: Alternative.me

This fear has led to a risk-off mode among investors, explaining the ongoing correction in crypto prices, including SOL.

Decreasing activity on the Solana network

The Solana network has grown tremendously over the last year, shaking off the effects of the FTX collapse. High developer activity characterized by airdrops led to the launch of many projects, including successful memecoins like BONK and Dogwifhat (WIF). The blockchain’s total value locked (TVL) has increased by 8,800% since November 2023.

However, SOL’s latest price drop follows a decrease in onchain activity, as fewer users engage with the network, contributing to the decreasing momentum.

Data from DefiLlama reveals the TVL on the Solana network has decreased by 17% from $4.98 billion on June 5 to $4.11 billion on July 5, suggesting that users and developers are interacting less with the network.

Total value locked on BNB Chain. Source: DefiLlama

Data from DappRaddar showed that in a comparison of blockchains by monthly network activity, Solana emerged as the clear leader, with 352 million transactions over the past month—dwarfing Ethereum’s 6.97 million and BNB Chain’s 18.9 million.

However, additional data revealed that Solana’s DApp volume has decreased by 29% over the last 30 days. Currently, Solana’s 30-day DApp volume stands at $3.52 billion, which is far below that of the Ethereum blockchain ($201.91 billion) and the Tron network ($26.69 billion). Notably, the NFT volume decreased by 46.5% over the same period.

Layer-1 blockchains ranked by monthly activity. Source: DappRadar

This data indicates a drop in NFT trading and staking, significantly impacting the volume decrease. Moreover, token trading on the blockchain trended lower over the month, adding to the bearish sentiment.

Related: Price analysis 7/5: BTC, ETH, BNB, SOL, XRP, DOGE, TON, ADA, AVAX, SHIB

SOL price is in a technical correction

From a technical standpoint, SOL's price decline is part of an extended technical correction that started on March 18, when it turned away from its multi-year high of $209. The SOL/USD pair has dropped by over 32% since.

SOL/USD daily chart. Source: TradingView

As of July 5, SOL was testing its multi-month horizontal support line of a descending triangle for a potential rebound toward the descending trendline at around $150—up 11% from the current price levels.

Conversely, a break below the horizontal support line risks a decline toward the technical target of the descending triangle at $74. Such a move would represent a 45% decline from the current price.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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