Solana Struggles: New User Decline Meets Price Drop
Solana (SOL), the fifth-largest cryptocurrency, has been grappling with a decline in new users and a corresponding drop in price. Here’s a breakdown of the situation:
New User Slump
On-chain data reveals a 51% decrease in new Solana wallets joining the network over the past month. This suggests a potential slowdown in user adoption, a key driver of cryptocurrency growth.
Solana’s Dominance in Trading Volume
Despite the recent struggles, Solana remains the second-largest blockchain by trading volume. This dominance is attributed to factors like the SOL price surge earlier this year and memecoin activity on the network.
FTX Auction Impact
The recent auction of locked SOL coins from the FTX estate might have exerted downward pressure on the price. However, some investors received SOL at a 24% discount, potentially mitigating the impact.
SOL Price Woes
SOL price has fallen by 34% in the last 30 days, dropping to a 10-day low of $133. The decline in new users is seen as a contributing factor to the price slump.
Analyst Forecasts
Some analysts predict a further price drop to $125 due to the lack of new user acquisition. Others suggest a potential rebound to $150 if selling pressure subsides.
Bullish Hopes
Some analysts, like Raoul Pal, believe Solana could outperform Bitcoin and Ethereum in a coming “Banana Zone” of market growth. However, Pal emphasizes the importance of project fundamentals and warns against excessive hype.
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