Solana, after hitting a new all-time high, faces a downward trend due to a spike in transaction fees and a decline in transaction count. The Total Value Locked (TVL) also sees a significant drop, signaling potential further declines.
Solana (SOL) recently experienced a significant decline in price following an impressive rally to a new all-time high. While the token initially surged by 28.20%, reaching $294.33 on January 19th, it has since dropped by 18.75%. This downturn is attributed to several factors, including a spike in transaction fees and a sharp decrease in transaction count. According to Glassnode, the Solana blockchain witnessed a record high in transaction fees after the launch of the TRUMP token.
In just 10 minutes, 6,000 SOL (approximately $1.4 million) was paid in fees, leading to a decline in transaction count from 450,000 to 150,000. This pattern often precedes price declines, which is currently affecting SOL, contributing to its 11.86% drop in the past 24 hours. Concurrently, Solana's Total Value Locked (TVL) has experienced a significant decrease since its peak on January 19th. The TVL, which measures funds deposited in liquidity pools and protocols on the chain, has fallen from $12.191 billion to $10.964 billion. This downward trend suggests further declines are possible as bearish sentiment persists. AMBCrypto's analysis identified a potential support level for SOL, which could indicate the extent of the TVL decline. The token could potentially drop to a demand zone between $222.80 and $210.10. If SOL reaches this zone and maintains support, it could rebound towards its all-time high. However, if bearish sentiment intensifies and the demand zone fails to hold, SOL may experience further price drops
Solana SOL Transaction Fees Total Value Locked (TVL) Bearish Sentiment Cryptocurrency Market
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