Altcoin

What’s Behind Solana Price Drop Today?

Published

4 weeks ago

October 17, 2024

The Solana price is down over 4% today, just two days after reaching a weekly high at around $158. This price decline is due to several factors, including a drop in Solana’s network activity between October 16 and 17. Meanwhile, the sentiment in the broader crypto market has also affected SOL, with the Bitcoin price cooling off after the rally earlier in the week.

Why The Solana Price Is Down

SOL is down over 4% today following a decline in the network activity on Solana. DeFiLlama data shows that decentralized exchange (DEX) volume on the network dropped on October 16 and 17, with $1.69 billion and $1.68 billion recorded on these days. The network recorded a weekly high DEX volume of $2.06 billion on October 14, with the Solana price rising to as high as $158 in the process.

The drop in DEX volume means fewer users interacted with the network on October 16 and 17, which explains why the coin’s price dropped. A surge in trading volume typically leads to a spike in price, while a drop in volume leads to downward pressure. The drop in Solana’s DEX volume comes just days after SOL overtook ETH in weekly and daily DEX volume.

It is worth mentioning that Ethereum has once again reclaimed its crown from Solana. In the last 24 hours, Ethereum has recorded a DEX volume of $1.7 billion compared to Solana’s $1.6 billion.

Meanwhile, the Solana price is also down today because of the sentiment in the broader crypto market. The Bitcoin price is currently correcting after the rally earlier in the week. Other coins tend to follow the flagship crypto, which explains why SOL is also experiencing a price correction of its own.

What Next For The Crypto’s Price

Crypto analyst Crypto Patel stated in an X post that the Solana price is consolidating within key and resistance zones. He further claimed that the price had rejected the resistance at around $160, which could lead to a decline towards the support level at around $140 for a retest.

If the Bitcoin price continues to retrace, a retest of the $140 support zone looks likely for the Solana price. Crypto analyst Ali Martinez recently stated that BTC could drop back to $63,300 if it fails to hold the critical support level at $66,780 following a retest.

In the long term, SOL’s outlook is undoubtedly bullish, as crypto commentators like Eugene Ng Ah Sio predict that the crypto could hit a new all-time high (ATH) of $1,000.