Why Is Solana Price Down Today?

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As a seasoned crypto investor with a decade-long journey in this dynamic market under my belt, I must admit that the current state of Solana is causing me a bit of concern. Having witnessed the meteoric rise and fall of countless digital assets over the years, I’ve learned to navigate these turbulent waters with caution.

As an analyst, I’ve observed that the crypto market has plunged into the fear zone starting yesterday, signaling a reluctance among investors to engage in trades. This hesitation is causing cryptocurrencies, particularly altcoins such as Solana, Ethereum, XRP, and many others, to struggle in the market. Interestingly, Solana, which has been dominating due to high demand for its tokens, seems to be grappling with this trend. Specifically, the Solana price dipped below $130 earlier today, causing concern among holders about potential further declines given its ongoing weekly downtrend

Over the past week, Solana’s value has dropped by over 8%, now standing at approximately $133.28. Following a brief recovery, there’s been a noticeable selling pressure that could potentially extend the downward trend if the price of SOL doesn’t climb above its pivot point of $139.42

Three Reasons Why Solana Price Is Struggling

At the start of the year, Solana experienced a significant growth spurt, reaching an all-time high of $202.87. However, as the bulls have started to lose control over the market, many altcoins, including Solana, have faced challenges, especially when the market entered the ‘fear’ zone yesterday and has continued today

Despite other factors, the main reason for Solana’s price surge is likely due to the significant sale of assets by Pump.fun, which unloaded approximately 49% of its accumulated holdings. As a result, Pump.fun, a meme coin deployer on the Solana network, has sold off around 274,373 SOL (worth roughly $42.64 million) as reported in recent Lookonchain analyses

As an analyst, I’ve been closely observing the growth trajectory of this platform since its launch in January. It has witnessed a significant surge in popularity and token sales, reaching a staggering $680K in revenues (equivalent to approximately 91 million dollars) and amassing over 0.1% of Solana’s current supply

0,300 units of Fee Account were recently sold for approximately $1.38 million (or 1,380,000 SOL), with the latest transaction occurring at a price of $134.46, has now sold an impressive 264,373 units of SOL for a staggering total of around $41.64 million, at an average price of $157.50!
— Lookonchain (@lookonchain) September 3, 2024

On September 3, there was a second round of selling that offloaded 10,300 $SOL ($1.38M) at approximately $134.46, causing an immediate decrease in the SOL price. Some people refer to this as cashing out profits, while others see it as selling the token at a lower price before a potential price increase

Nevertheless, Solana’s troubles didn’t cease there. Recent DefiLlama findings indicated that Solana’s daily income plummeted to a six-month low on Monday, largely due to the surge of rival platforms like Ethervista and SunPump. According to these reports, Solana’s revenue was a mere $190.7K on September 1st, representing a staggering 90% drop from its peak in March at $2.47 million

Declining revenue and fierce competition have led to a decrease in Solana’s price, notably following the debut of SunPump, which has surpassed Pump.fun in popularity. The increased popularity of SunPump is also significant for its native token, SUN, as analysts predict that its value could potentially triple in the future

Final Thoughts

Although Solana’s price saw a 4% increase, it continues to face challenges on the weekly charts, dipping to around $123,000 on August 4th. This downturn followed Pump.fun, the meme coins deployer for Solana, selling approximately half of its accumulated SOL assets at an average price of $157.5. The struggle intensifies as new competitors like Ethervista and SunPump enter the scene, putting additional pressure on the altcoin

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2024-09-05 17:27