As a seasoned crypto investor with a few battle scars to show for it, I must admit that the recent performance of Solana (SOL) has left me feeling a bit uneasy. The 5.5% decline between Oct. 9 and Oct. 15, struggling to maintain the $150-support level, is a red flag that I can’t ignore. The ongoing correction in the prices of Solana-based memecoins, the decreasing network activity, and the drop in DeFi applications (DApps) are all worrying trends.
Between October 9th and October 15th, Solana’s native token, SOL, saw a drop of approximately 5.5%. Despite attempts, it failed to sustain the $150 support zone.
According to information from CryptoMoon Markets Pro and TradingView, Solana (SOL) has been on a three-day losing streak, currently trading at $152.27, marking a 2.3% decrease in its value over the past day.
Solana memecoins are flashing red
On October 17th, Solana’s decline aligns with a broader price adjustment affecting meme coins built on the Solana platform. Over the past day, many of these tokens have suffered losses, as illustrated in the chart below.
As a researcher studying the meme coin market, I observed that Book of Meme experienced the steepest daily setback yesterday, plunging approximately 7.3%. In comparison, Dogwifhat, the largest Solana-based memecoin by market capitalization, also saw a decline in value, dropping by around 3.7% on the same day.
This drop in memecoin prices accompanies a drop in the total market capitalization of meme tokens on the Solana blockchain, which has declined by 2.1% in the last day to $10.5 billion.
The slump of Solana memecoins reflects a broader investor sentiment toward the layer-2 ecosystem, which negatively affects the price of the SOL token.
Solana network activity tanks
The recent decline in SOL’s price can be attributed to less activity on the blockchain, as there seems to be a reduction in the number of users interacting with the network, leading to a slowdown in its overall momentum.
A decrease in transactions and a slowing growth rate in Decentralized Finance apps (DApps) contribute to lessened network activity and reduced income, highlighting a potential trend.
According to Defilama, the trading volume on Solana decreased to approximately $1.7 billion on October 17th, from $2 billion on October 14th. The highest trading volume ever recorded on its blockchain was $5.6 billion, which occurred on August 18, 2024.
According to recent figures from DappRadar, the volume of decentralized applications (DApps) on the Solana blockchain has dropped by approximately 53% over the past seven days compared to the week before. Over this period, the layer-1 blockchain processed a total of about 39.7 million transactions, representing a decrease of around 53%.
As a crypto investor, I find it interesting that DappRadar utilizes the number of Unique Active Wallets (UAW) as a measurement. Essentially, this figure represents the count of distinct wallet addresses engaging with a blockchain’s smart contracts, providing insights into the level of user interaction and network activity within the crypto space.
The figure below shows a 48% decline in total UAW on the Solana network over the last week, with 8.6 million UAWs interacting with the layer protocol over the last 30 days.
Solana price bearish triangle hints at a 40% drop
Technically speaking, the drop in SOL’s price is a prolonged adjustment following a rejection at its long-term peak of $209, which occurred on March 18th.
Currently, on October 17th, the price of SOL is attempting to breach the long-term resistance level of a descending triangle formation, with the hope of reaching the September 29th peak at around $161.
If the issue continues and the SOL price doesn’t improve, it might trend towards the horizontal support line at $125. If it drops below this point, Solana could potentially experience a drop towards the technical goal of the descending triangle, which is around $75. This would equate to a possible 50% decrease from the current price level.
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2024-10-17 16:24