Solana (SOL) Drops Below $10; Bleeds 20% In a Week

Solana (SOL) Drops Below $10; Bleeds 20% In a Week
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Solana (SOL) has plunged below $10 for the first time since February 2021 as the cryptocurrency continued to witness a steep decline over the past week. Solana has shed nearly 94% of its value since the beginning of 2022. Will be able to survive the coming year?

Touted as the “Ethereum killer”, Solana (SOL) has experienced a rough year, so far. The Solana network has suffered brutal losses throughout the year with SOL tanking almost 95% since the beginning of 2022. The downtrend was exacerbated after the collapse of crypto exchange, FTX. The digital asset seems to have been hit hard following the bankruptcy

Solana Takes a Tumble

Solana (SOL) Drops Below $10; Bleeds 20% In a Week

According to CoinMarketCap, Solana (SOL) is down more than 6% in the last 24 hours, currently trading at $9.40. SOL has dipped below the $10 mark for the first time in two years since 2021. The digital asset sank almost 23% over the past seven days as the FTX implosion continues to reverberate across the crypto ecosystem.

SOL was one of the worst-hit cryptos after the FTX collapse, falling from $36.9 before the FTX bankruptcy to the current price. Furthermore, SOL has dropped more than 51% since the frenzy around FTX began unfolding on November 2. In the same period, Bitcoin (BTC) has declined 17.6%, while Ethereum (ETH) has fallen about 21.3%. 

Reasons for the Fall

Market experts have pointed out several other factors that have decimated the price of Solana (SOL). The Solana network is the second largest NFT ecosystem globally. However, of late, many high-profile projects and developers have signalled to abandon Solana and wished to migrate to other networks.

Recently, DeGods and y00ts, two of the biggest NFT collections on Solana, announced their imminent departure from the ecosystem. The migration of these major NFT projects could trigger further ecosystem departures, especially if SOL price valuation does not improve in the coming months.

In addition, developer activity has also tumbled on the Solana network. As per the data provided by Token Terminal, Solana has suffered a massive 90% dip in the number of developers on the network, which fell from 2,500 in January to a mere 75 over the past few months. However, the Solana team has refuted these figures deeming them as fabricated numbers.

Solana (SOL) Drops Below $10; Bleeds 20% In a Week

Solana has noted a declining total value locked (TVL) on its network. DeFiLama suggested in a report that Solana’s TVL has dropped from around $68 million in June to $18.99 million at the time of writing. Recently, Mike Alfred, an investor who serves as a board member of BTC miner Iris Energy and digital asset investment platform Eaglebrook Advisors, compared Solana (SOL) to Santa Claus. He tweeted,

“Before you make fun of that kid who still believes in Santa, just remember there are people who still believe in Solana.”

On December 27, Ben Armstrong, a crypto influencer and YouTuber, said there would be an increase in the number of projects that would leave the Solana ecosystem. Armstrong wrote,

“I’m sorry if this hurts your feelings… but this is facts. More NFT and crypto projects will leave Solana.”

Will Solana Rebounce?

In contrary, Anatoly Yakovenko, co-founder of Solana Labs Inc, has emphasized that only 4% of the projects built on Solana have been impacted by the FTX collapse. He further claimed that nearly 80% of the teams building projects on the Solana blockchain have no exposure to FTX at all. In fact, Yakovenko seemed optimistic that the Solana ecosystem would grow due to the interest generated by the team’s efforts to explore uncharted territory.

Another user higlighted that Solana (SOL) is “nowhere near dead” as the network is facing minor issues and will make a comeback. He said,

“Solana is nowhere near dead, nor is it vaporwave. They have a quality project and team, albeit with some hiccups that need fixed.”


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