With the collapse of FTX, the struggle for the Solana blockchain platform grew rapidly. In the past 8 weeks, FTX’s sister firm Alameda Research and investors have sold off the platform’s native token SOL for 73%. The NFT project and its validators are moving to other blockchains. In the midst of rising FUD about Solana and SOL, here’s what on-chain data indicates.
The rise of FUD has taken away Solana’s shine
According to Santiment, in a tweet on December 28, Solana’s FUD continues to rise. FTX and Alameda’s relationship with Solana has severely damaged its reputation in the crypto market. Since November 5, the price of SOL tokens has fallen 73%.
Based on on-chain data, Binance’s funding rate turned positive on December 27 and traders planned to buy the heavily retracing asset SOL. A massive liquidation, however, caused the SOL price to fall over 10% in just a few hours. Some crypto analysts predicted a low of $9.91 for SOL today.
Solana has suffered massively due to the bear market, as the blockchain has been halted, exploits have been discovered, and developer activity has ceased. The top NFT projects on Solana, DeGods, and y00ts, recently announced plans to move to Ethereum and Polygon, respectively. These 2 projects dominate Solana’s NFT ecosystem, according to DappRadar.
In addition, the TVL on Solana has dropped from $10 billion to $210 million in just one year, according to DeFiLlama. According to Santiment data, developer activity has also decreased significantly.
The price of SOL may fall further.
The price of Solana (SOL) is currently $9.97, down 10% in the last 24 hours and 18% in the last week. The low and high for the day are $9.91 and $11.21, respectively.
The 167% increase in trading volume over the last 24 hours as the SOL price fell indicates a drop in sentiment. The price of SOL is expected to fall to $8.20 according to technical indicators. Furthermore, if the SOL price breaks above the $10.50 resistance level, the rally may not last long.