Solana became one of the most impacted crypto projects following the collapse of FTX crypto exchange in early November. Today, its price trades 70 percent below the pre-FTX collapse, and despite going up by 12 percent in today’s trading session, most fundamental analyses continue to show that it is headed for another downward trend.
Solana crypto fell by over 90 percent in 2022,
Solana (SOL), a cryptocurrency token that was expected to challenge ether with its eco-friendly approach, faster transaction speeds, and more consistent costs, has seen its market cap collapse from over $55 billion in January to barely above $3 billion at the end of the year.
In recent days, Solana has continued to decline, even as the rest of the crypto market has been relatively stable. In the last week, it has fallen over 10%, while ether has lost 1.7%, and bitcoin has dropped 1.2%.
Several large NFT projects on Solana announced their departure from the platform on Christmas Day. However, the drop in Solana’s value is not solely due to this news. On Thursday, Solana’s value decreased by 5.8% within one hour of trading, reaching its lowest level since early 2021. Although Solana has recovered somewhat, with a market cap above $3.5 billion and a 200% increase in 24-hour trading volume, it is still down from its previous level.
Solana faced a series of public struggles in 2022, including a network outage that took it down for over 24 hours in January 2022, leading to a fall in its token price from $141 to a low of $20. It has also faced criticism for its proof-of-history consensus mechanism, which was supposed to be a differentiating factor, but has faced scalability issues.
Despite this, it gained 12,000% in 2021 and reached $250 by November, supported by growing interest in non-fungible tokens ( NFTs). The total market capitalization of the cryptocurrency market currently stands at $798.4 billion, down from a peak of over $3 trillion in November 2021. While Solana has no direct relation to FTX, its association with Bankman-Fried has had a negative impact on its value.
Solana Price Prediction 2023
Following an over 90 percent drop in 2022, there is a high likelihood that in the first quarter of this year, we might continue to see Solana continue to drop.
Therefore, my Solana price prediction for the next few months is a continued downward trend. It is highly likely that we might see its value drop to trade below the $5 price level in the coming weeks. Overall, my Solana price prediction for both the short-term and long-term is to the downside. However, a trade above the $15 price level will invalidate my bearish trend analysis.