For Solana Price, it’s been a choppy week, month and year. SOL holders were already suffering massive losses, but the FTX results only deepened the crisis.
A year ago, the Solana ecosystem was booming with developers, new projects, dApps, and well price gains. Multiple network outages, coupled with bearish macro market conditions, managed to push SOL price down 95% from its all-time high in November 2021.
One of the major reasons behind Solana’s increase in losses was its close association with FTX and Sam Bankman-Fried. With the crypto market speculating whether Solana can ever recover from its losses, a look at the Solana ecosystem has dampened investor expectations.
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Solana Price and Sentiment Suffer
Even though the SOL price was already following a major bearish trendline, analysts expected the price to decline further. The recent FTX crash brought SOL prices down to March 2021 levels.
Massive selling was the tune of the market, with the trading volume for Solana taking a major spike in tandem with the falling prices. After the FTX crash, SOL lost over 63% of its price in a matter of days.
Notably, the Relative Strength Index for SOL was still in the oversold zone, indicating that the market is dominated by sellers.
Solana has often been described as an Ethereum killer, but SOL appears to have neither the development activity nor the social interest that would allow it to come close to Ethereum. Development activity at Solana fell to an all-time low on November 11.
Furthermore, except for a few days in November, Solana also showed a consistently negative weighted social sentiment. With technical indicators and social sentiment turning bearish, can the NFT and DeFi ecosystem save SOL?
Will the DeFi and NFT ecosystem support SOL?
The Solana DeFi ecosystem took a hit after FTX collapsed. The total value (TVL) locked in DeFi on Solana has declined by over 96% since hitting an all-time high of $10 billion. Data from DeFiLlama suggested that there was only $318.05 million in collateral in DeFi on Solana.
The number of unique addresses that fetched over $100,000 of NFTs on Solana registered a significant decline since November 3rd. The total number of NFT trades also showed no major activity in the Solana NFT market.
While everything else seemed to be in trouble, one positive trend for Solana holders was that the percentage of the total supply of the stablecoin held by whales exceeded $5 million.
Whales seem to have increased their catch by 0.88%, even though SOL is in shambles. At press time, Solana’s price trades at $14.19 with a weekly gain of 4.01%. Going forward, a slow and prolonged climb in SOL prices can be seen.
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