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On-Chain Data Indicates Further Struggles For Solana, 25% Fall In SOL Price

Solana's struggles may continue in 2023 as projects and validators moves to different blockchains and SOL price fell 73% since FTX collapse.
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On-Chain Data Indicates Further Struggles For Solana, 25% Fall In SOL Price

Struggles for the Solana blockchain platform grew massively following the collapse of FTX. The platform’s native token SOL price has tumbled 73% in the past 8 weeks due to selloffs by FTX’s sister firm Alameda Research and investors. NFT projects and validators are moving to other blockchains. Amid the rising FUD, here’s what on-chain data indicates about Solana and SOL.

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Solana Loses Shine Amid Rising FUD

On-chain analytics platform Santiment in a tweet on December 28 said the FUD surrounding Solana continues to rise on Crypto Twitter in recent days. Solana’s relation to FTX and Alameda has severely impacted its reputation in the crypto market. It resulted in SOL token price falling 73% since November 5.

According to on-chain data, Binance’s funding rate turned positive on December 27 and traders were planning to long the heavily retracing asset SOL. However, the SOL price fell over 10% in just a few hours due to massive liquidations. The SOL price made a low of $9.91 today as expected by some crypto analysts.

Solana – Binance Funding Rate. Source: Santiment

The bear market has affected Solana massively, as it saw several blockchain halts, exploits, and developer activity ceases. Recently, DeGods and y00ts, top NFT projects on Solana, announced plans to shift to Ethereum and Polygon, respectively. According to DappRadar, DeGods and y00ts are the top 2 NFT collections on Solana blockchain.

Moreover, the TVL on Solana has dropped from $10 billion to $210 million in just a year, as per DeFiLlama. Santiment data confirms that the developer activity has also dropped significantly.

Solana Development Activity. Source: Santiment
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SOL Price Risks More Fall

Solana (SOL) price is currently trading at $9.97, down 10% in the last 24 hours and 18% in a week. The 24-hour low and high are $9.91 and $11.21, respectively.

The 167% increase in trading volume amid the SOL price fall in the last 24 hours indicates a decline in sentiment. Technical indicators paint a more bearish trend for SOL price and predict a fall to $8.20. Moreover, if the SOL price break above the $10.50 resistance level, the rally may not sustain for long periods.

Also Read: Binance Suspends Terra Classic (LUNC) Burn Mechanism

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Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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