Solana has been on a depressing downtrend ever since the FTX crypto exchange imploded. The asset has already lost a massive chunk of its all-time high value but the onslaught looks to be far from over. In the last seven days, the losses for the digital asset have ramped up, dragging its price down into single-digit territory.
Solana Posts More Than 20% Losses
According to crypto data aggregator Coinmarketcap, the price of Solana is down more than 20% in the last 7 days alone. These losses align with the general bear market trend being experienced in the crypto sector but the decline in faith in the digital asset brought about by the collapse of FTX, Solana’s biggest support, puts added pressure on it.
Sam Bankman-Fried, through FTX and Alameda Research, had funneled massive amounts of funds into the Solana ecosystem, which in hindsight reveals why the network had grown so much in such a short period of time. However, with all of that money gone, the network has had a hard time keeping up.
Also, as James Spediacci notes on Twitter, a lot of the dev activity on the network was actually faked. It alleges that SOL stablecoin exchange Saber and DeFi protocol Sunny had made up about 70% of the total value locked on the Solana blockchain at its peak were operated by the Macalinao brothers, citing a report from CoinDesk.
With all of these gone and no new money being injected into the ecosystem by Bankman-Fried, Solana is now in a freefall of its own making. Additionally, Matrixport announced that it would be delisting all Solana products on Dec. 30, dealing another blow to the already struggling network.
SOL price falls to single digit for first time in 22 months | Source: SOLUSD on TradingView.com
SOL To Recover From Single-Digits?
This week, the price of SOL dropped below the $10 level for the first time in almost two years. It is now sitting at its lowest point since February 2021, which was the last time that Solana had seen single-digit prices before the bull market took over.
However, even with the digital asset dropping so low, it is unlikely that the decline is over. One thing to always note is how badly cryptocurrencies tend to perform in their first bear cycle, even bitcoin and ethereum weren’t exempted. But one thing that sets SOL apart is the factors surrounding its decline.
While digital assets such as bitcoin and ethereum still had ample support and faith in the market even after dropping more than 90% in their first bear markets, Solana is having a hard time keeping the faith. Add in the fact that leading NFT projects DeGods and yOOts migrated from Solana to Ethereum and Polygon and it shows just how negative the sentiment surrounding the network is.
Nevertheless, this is not to say that SOL is completely out of the game. There are been more surprising recoveries in the crypto world and SOL remains popular in the media, albeit in negative circumstances. The next bull market could hold a lot of promise for the digital asset if it is able to survive the crypto winter.
Featured image from Crypto News, chart from TradingView.com