Solana (SOL) is experiencing a downturn: what's behind it?

Solana (SOL) is experiencing a downturn: what's behind it?

The price of Solana (SOL) fell 6.5% today, reflecting the overall losses in the cryptocurrency market. The current value of SOL is hovering around $129, and further declines are imminent. The main factors affecting the price include:

1. Declining interest in DeFi: Use of decentralized financial applications on the Solana platform is declining, with total locked-in value (TVL) down 45.5% since mid-January, indicating a loss of investor interest.

2. Decline in SOL activity : Data shows a sharp decline in transactions on the network, affecting fee income and subsequently the price of SOL.

3. Negative financial indicators: Open interest in the futures market fell from $8.57 billion to $4.03 billion, indicating traders exiting positions. Negative funding rates further indicate a lack of confidence in the short-term price performance.

Technical analysis suggests that the SOL price could fall to the USD 100 level if it breaks the key support level of USD 120. On the other hand, positive signals such as RSI divergence suggest that investors could start accumulating SOL at lower levels.

Overall, Solana faces significant challenges that may affect its future development.

*This is not an investment recommendation.

Coingarage team