- Solana price has been in a deep sell-off recently.
- It has crashed by over 50% from its all-time high.
- We explain why the coin has declined and what to expect next.
Solana price has not been left behind in the ongoing cryptocurrency sell-off. SOL, the native token of the ecosystem, is trading at $124, which is the lowest level since September 22nd. It has tumbled by over 51% from its highest level in November last year.
Why is SOL crashing?
Solana is one of the best-known Ethereum-killers in the world. It is a leading network whose token has a total market capitalization of over $39 billion, making it the sixth biggest cryptocurrency in the world.
At its peak, Solana had a market capitalization of over $75 billion, meaning that its investors have lost more than $36 billion in the past two months. While this is bad, investors in Cardano have lost over $50 billion.
There are several reasons why the Solana price has crashed sharply in the past few months. First, unlike other blockchain platforms, Solana is known for its outages. Last year, the network spent an entire weekend being offline. This year alone, it has also suffered a denial of service (DDoS) attack.
Therefore, while the network has made some improvements, some developers have moved to other stable platforms like Terra, NEAR, Hedera Hashgraph, and Avalanche.
Second, Solana price has also declined because of the rising competition in the smart contract industry. According to DeFi Llama, there are now about 50 DeFi apps built in Solana that have a total value locked (TVL) of $9.3 billion.
While that is a strong number, it is substantially lower than its all-time high of over $15 billion. Also, a closer look at the sector shows that other networks like Fantom, Cronos, and Arbitrum are growing at a faster pace.
Third, the decline in Solana price is mostly because of the other external factors such as regulations and higher interest rates.
Solana price prediction
The daily chart shows that the Solana price has been in a strong bearish trend in the past few months. It has managed to drop below the key support at $150, which was the highest level last week.
The coin has managed to drop below the 200-day moving average and the 50% Fibonacci retracement level. Oscillators like the Relative Strength Index and MACD have all declined.
Therefore, there is a possibility that the SOL price will likely keep falling as bears target the key support at $101, which is along the 61.8% Fibonacci retracement level.
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