- Solana price has formed triple-top and bearish pennant patterns.
- The volume of its DeFi and NFT platforms has crashed.
Solana price came under intense pressure on Monday as demand for the coin eased. The SOL token slipped to a low of $31.25, which was about 35% below the highest level in August of this year. Its market cap has slipped to a low of over $11 billion, making it the 9th biggest cryptocurrency in the world.
Solana activity falling
Solana is a blockchain project that aims to become the best alternative to Ethereum. It has better features such as low gas fees and faster transaction speeds. As a result, the platform has been embraced by some of the leading developers in the world like Solend, StepN, Brave, and Audius among others.
Solana has a strong market share in key industries in the decentralized universe like DeFi and Non-Fungible Tokens (NFT). Some of its top NFT platforms are Magic Eden, Exchange.art, and Digital Eyes among others.
However, data shows that Solana’s ecosystem is not doing well. For example, according to DeFi Llama, the total value locked (TVL) in its ecosystem has crashed from over $10 billion in November last year to just $1.4 billion today.
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Similarly, its NFT ecosystem has kept struggling in the past few months. According to CryptoSlam, the monthly volume of NFTs traded in its ecosystem crashed from over $311 million in April to about $58 million in August.
At the same time, a report by DappRadar revealed that the number of Unique Active Wallets (UAW) dropped by 53% in August. The number of transactions fell by 68%. This report attributed the sell-off to a hack that happened in the beginning of the month.
Solana price has continued dropping in the past few months as demand for cryptocurrencies has dropped. Indeed, other cryptocurrencies like BTC and ETH have been in a strong bearish trend in the past few months. BTC is currently trading below $20,000.
Solana price prediction
The four-hour chart shows that the SOL price made a triple-top pattern in July and August. In price action analysis, this pattern is usually a bearish sign. It managed to move below the neckline of this pattern at $34.70 in August.
Solana price has moved below the 25-day and 50-day moving averages, which is a bearish sign. The coin has also formed what looks like a bearish pennant pattern. In price action analysis, this pattern is usually a bearish sign. Therefore, the coin will likely have a bearish breakout as sellers target the key support at $25.
