The price of Solana (SOL) has recently dropped below a key technical threshold for the first time since March 2022, raising concerns about the token’s potential for further decline. The price of Solana has dipped below its realized price, signaling that many holders may be underwater on their investments. This drop coincides with a broader market selloff, and analysts are now closely watching how the situation will unfold in the coming months.
Key Technical Level Breached
For the first time in almost three years, Solana’s price has fallen beneath the realized price, which represents the average price at which Solana tokens were last moved or purchased. As of March 11, the price of SOL was approximately 8% lower than its realized price of $134, which was last seen on March 9, 2022. When the price falls below this level, it suggests that many holders are currently experiencing losses, as they paid more for their tokens than they are worth now.
The last time SOL breached this key level was in March 2022, which marked the beginning of a multi-week decline for the token. After that slump, the price only managed to recover above the realized price level in November 2023.
Solana’s Struggles Amidst Market Selloff
The recent decline in Solana’s price is part of a broader selloff in the cryptocurrency market. SOL’s price drop coincides with a significant decline in Solana’s network revenue. Data from DefiLlama reveals that Solana’s fee revenue has plummeted by 90%, falling to approximately $420,000 per day from a peak of $4.2 million in January when SOL was trading at $250. This drastic drop in revenue is believed to be tied to the memecoin frenzy, which has significantly impacted the network’s growth and activity.
Predictions and Future Scenarios for Solana
Despite these setbacks, some analysts remain optimistic about Solana’s long-term potential. In October 2023, asset management firm VanEck predicted that Solana could see an extraordinary 10,000% growth by 2030, with the blockchain potentially attracting 100 million users. However, VanEck also offered a bearish scenario, where SOL could drop to around $9.81. On the other hand, a bullish outcome could see Solana’s value surge to as high as $3,200 by 2030.
As Solana grapples with these technical and market challenges, the coming months will be crucial in determining whether it can regain its momentum or if it will continue its downward trajectory. Investors and analysts alike will be watching closely as the situation unfolds.
