After experiencing strong hype in 2021, most Ethereum-killers have struggled in the past few months. For example, Solana’s price has fallen by about 60% from its highest in 2021. Its total market cap has fallen to about $33 billion. Other platforms like Polygon, Avalanche, and Polkadot have all retreated sharply in the past few months.
Solana price has declined because of the slowing activity in its ecosystem. One of the best ways to see this is by looking at its performance in the DeFi industry. According to DeFi Llama, the total value locked of the network has declined from over $14 billion in November last year to about $6 billion today. So while most platforms have seen a sharp drop in TVL, Solana’s decline has been much deeper. Some of the top apps built using Solana are Marinade Finance, Solend, and Raydium.
However, some platforms built in Solana have done well. The best-known one is StepN, the fast-growing platform at the intersection of fitness, gaming, and non-fungible tokens (NFTs). Others that are doing well include Squad, Swim, Formfunction, and BR1 Metaverse. Other well-known apps built in Solana are Audius, Brave Browser, and Solanart.
Another reason why Solana price has dropped is the ongoing upgrade of Ethereum platform. The current version and the beacon chain merge will happen in June this year. It will lead to more demand for Ethereum, considering that its platform will be much faster than other platforms.
Turning to the hourly chart, we see that the SOL price has been in a strong bearish trend in the past few days. Along the way, the coin has remained below the descending trendline shown in purple. It has also formed a descending channel and is currently slightly below its upper side. At the same time, the MACD has moved below the neutral level.
Therefore, the coin will likely continue falling as bears target the lower side of the channel at about $95. A move above the resistance at $110 will invalidate the bearish view.
This post was last modified on Apr 13, 2022, 14:18 BST 14:18