- Solana price has been in a freefall in the past few months.
- Solana's DeFi TVL has collapsed to $416 million.
The cloud thickened for Solana as its DeFi ecosystem continued to nosebleed. Solana price plunged to a low of $10 as concerns about the ecosystem continued. SOL has fallen by more than 95% from its all-time high. Subsequently, the coin’s total market cap has plunged to $4.4 billion.
DeFi TVL plunges
Solana price has become one of the worst-performing crypto major in the world. Its con has plunged because of its close relationship with FTX and Alameda Research. The latter was one of its top funders and holders.
The biggest relationship between the two was intensified because of Serum, which was the biggest DeFi protocol in Solana. Serum was created by a team associated with FTX. The relationship was so close that FTX held the network key. As a result, when FTX collapsed, most people with Serum holdings dumped them. The total value locked in Serum has declined from an all-time high of $1.8 billion to the current $438k.
The community behind Serum has been working hard to rebuild through a new platform known as Openbook. Openbook uses the same code as Serum. It has attracted only $1.8 million in assets. It is still unclear whether the network will become successful.
Find out how to buy Solana.
Still, the biggest challenge for Solana is that the total value locked (TVL) has crashed to $416 million. At its peak, Solana was the biggest player in DeFi, with a peak TVL of over $12.2 billion. Therefore, for Solana price to recover, it needs to gain trust of users and its DeFi platform needs to rebound.
Further, SOL price has dropped as the volume of its NFTs remain under pressure. In November, Solana handled NFTs worth over $70 million. In December, this volume has dropped to about $41 million. At its peak, Solana was handling NFTs worth over $303 million.
Solana price prediction
The daily chart shows that the SOL price has been in a strong bearish trend in the past few months. Most recently, it forme a bearish flag pattern that is shown in black. In price action analysis, this pattern is usually a bearish sign.
Solana has moved below all moving averages while the Relative Strength Index (RSI) has formed a bullish divergence pattern. Therefore, Solana will likely continue falling as sellers target the next key support level at $9. A move above the resistance at $14 will invalidate the bearish view.
