One such example is Solana, which enjoyed the title of ‘Ethereum Killer‘ till a few weeks ago. But now, it has lost its mojo.
The digital token has slipped down to the eighth spot among the largest crypto tokens from the fifth position earlier. It has lost two-thirds of its value from the peak of $260 hit last November. The crypto-token was trading around $86.5 on Monday. In the last 24 hours, Solana has tanked more than 17 per cent with its traded volume down about 25 per cent in the given period. The volume in this token has remained low off late.
Market experts believe halts and interruptions in the network along with tightening policy cues and weaker sentiments for riskier assets are weighing on the sentiments for this token.
Shivam Thakral, CEO of BuyUcoin, a homegrown cryptocurrency exchange, said Solana network faced a major outage and was down for almost 48 hours. “The issue was resolved on Sunday but the damage was already done as Solana witnessed heavy liquidations,” he said.
Vikas Ahuja, CEO of CrossTower India said that the instability issue was experienced by validators and also many excessive duplicate transactions were noticed according to a notice on the Solana website on January 22.
Analysts further believe people are migrating to other cryptocurrencies as they offer reduced gas fees and also make transactions faster, which is not a good omen for Solana.
A point to observe is that Solana has not created a new defined low from a high time frame perspective, indicating that buyers are getting active and preventing a further decline, said Raj A Kapoor, Founder, India BlockChain Alliance.
OUTLOOK
Solana could drop to the $78-80 range if the crucial supports are breached and the present signals suggest that the market is headed for the same, thanks to the extremely volatile crypto space, said experts.
However, they said that investors with a 2-3 year horizon will always make a profit in the crypto market. Solana is an attractive buying option at $60-70, they added.
Kapoor of India Blockchain Alliance refrained from giving a long-term estimate but advised to stay invested in the token and buy it on dips.
Currently, Solana is commanding a market cap of little more than $27.3 billion, which was around $80 billion during its golden days. Its market cap is marginally ahead of Terra ($25.5 billion).
Gaurav Dahake, Co-founder & CEO, Bitbns said the overstressed beta version is one of the reasons for this fall in Solana and is expected to be resolved in a short time. Although there is more to be expected in terms of price going downwards, he said.
Solana is a highly functional open source project that banks on blockchain technology’s permissionless nature to provide decentralized finance (DeFi) solutions.
The idea and initial work on the Solana project began in 2017 and the token was officially launched in March 2020 by the Solana Foundation with headquarters in Geneva, Switzerland. Solana is a layer 1 token which is the base layer for cryptocurrencies, including Bitcoin.