A year ago, the Solana ecosystem was budding with developers, new projects, dApps, and well price gains. The many network outages, coupled with the bearish macro market conditions, managed to bring SOL price, down by 95% from its all-time high in Nov. 2021.
One of the major reasons behind Solana extending its losses was its deep connections with FTX and Sam Bankman-Fried. With the crypto market speculating whether Solana could ever recover from the losses, a look at the Solana ecosystem only worsened investor hopes.
Solana Price and Sentiment Suffer
Even though the SOL price was already following a major bearish trendline, analysts expected the price to fall further. The recent FTX crash brought SOL prices down to the March 2021 levels.
Massive sell-offs were the tune of the market, with trade volumes for Solana noting a major spike alongside the falling prices. Following the FTX crash, SOL lost over 63% price in a matter of few days.
Notably, the relative strength index for SOL was still in the oversold zone, showing that sellers dominated the market.
Solana has often been described as an Ethereum killer, but seemingly SOL had neither the development activity nor the social interest that would let it inch closer to Ethereum. Development activity on Solana had dropped to an all-time low on Nov. 11.
In addition to that, Solana also showed a persistently negative weighted social sentiment, barring a few days in Nov. With technical indicators and social sentiment pivoting towards bearish, can the NFT and DeFi ecosystem rescue SOL?
DeFi and NFT ecosystem to back SOL?
After the fall of FTX, the Solana DeFi ecosystem took a hit. The total value locked (TVL) in DeFi on Solana dumped by over 96% since its all-time high of $10 billion. Data from DeFiLlama suggested that there was only $318.05 million in collateral in DeFi on Solana.
The number of unique addresses that brought more than $100,000 of NFTs on Solana noted a significant drop since Nov. 3. The total NFT trades count also presented no major activity in the Solana NFT market.
While everything else seemed to be in distress, one positive trend for Solana holders was that the percentage of stablecoin total supply held by whales with more than $5 million saw a bump.
Seemingly, whales increased their holding by 0.88%, despite SOL being in tatters. At press time, Solana price traded at $14.19, noting 4.01% weekly gains. Going forward, SOL price could see a slow and long climb upward.
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