The Solana (SOL) ecosystem, according to Laguna Labs Chief Executive Officer (CEO) Stefan Rust, took a harder hit compared to other major digital coins such as Bitcoin and Ethereum following the collapse of the FTX crypto exchange.
Here’s a quick glance at SOL performance:
- Following the collapse of FTX, Solana lost almost 60% of its market value
- SOL has gone up by 2% over the last 24 hours, trading above the $14 marker
- Solana coins deposited on blockchain decreased sharply, from 68 million in June to just almost 25 million now
“In the current crypto shakeout, the most unfortunate innocent victim is the Solana ecosystem,” Rust said.
The CEO noted that the network’s native token, SOL, dropped by nearly 60% since FTX collapsed.
In comparison, Bitcoin fell by 19% and Ethereum went down by almost 20%.
Rust and other crypto players have reasons to believe that FTX and its trading firm Alameda Research sold large quantity of Solana crypto to mitigate its losses and stay afloat, affecting the cryptocurrency and its trading price.
Whether the altcoin can make a comeback during the next few days or not, it’s anyone’s guess up to this time especially that its technical indicators are considered underwhelming from the bulls’ perspective.
How Solana Is Performing And Where It’s Headed
After dipping all the way down to $12.07, SOL mounted a recovery of its own, going up by 2% over the last 24 hours to trade at $14.21 at the time of this writing according to tracking from Coingecko.
Source: TradingView
Over the last seven days, the crypto asset’s price action has twice indicated the formation of a bullish block that was supposed to be an encouraging sign for its investors.
The first was in November 10 when Solana swung between the narrow range of $18.3 and $12.35, establishing the mid-point of $15.33 as a crucial support and resistance zone.
The second instance was in November 14 when the altcoin ignored its lower timeframe bearish structure as it climbed all the way up to $14.43, flipping its bias to bullish.
With this, traders and investors looking to take profit should put their focus in the $13 to $13.25 region as an optimal entry point although it is not without risks as the asset continues to struggle right now.
Its Relative Strength Index (RSI) settled at the 50-55 score region, indicating that SOL volatility could easily ruin any plans for long trade set-up.
Image: Altcoin Buzz
Investors And App Developers Leaving Solana
In the aftermath of the FTX implosion and the negative effects it had on the crypto asset’s ecosystem, app developers and investors appeared to have abandoned the sinking ship.
According to data from DeFiLlama, the current number of Solana coins deposited in the blockchain that is widely used for decentralized finance applications stands at 24.74 million. The number is substantially lower than the 68.2 million tally that was recorded back in June.
In light of this development, co-founder Anatoly Yakovenko allayed the fears of investors, saying Solana Labs didn’t have any assets deposited on FTX and as far as financial stability, under its current condition, it will be good for business for the next 30 months.
Meanwhile, Raj Gokal, another co-founder of the company, also expressed his sentiments, saying this is a crucible for Solana which will make it even stronger in the future.
Crypto total market cap at $805 billion on the daily chart | Featured image from The New Daily, Chart: TradingView.com