Solana Price Continues to Drop Despite NFT Outperforming

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Solana’s NFT ecosystem has had a year-long summer, outperforming its competitors in the blockchain space. However, in recent times, NFT figures on Solana have begun to decline. At the same time, the price of the token is also decreasing.

Solana’s NFT ecosystem is shining brightly

Source: Santiment

SolanaFloor, a user who regularly posts information about blockchain on Twitter, highlighted SOL’s impressive performance. According to their tweet, SOL outperforms other blockchains such as Bitcoin, Ethereum, and Polygon in annual NFT blockchain user adoption. While SOL’s user count increased by 33% over the past 365 days, MATIC, BTC, and ETH’s users only increased by 29%, 10%, and 21%, respectively.

Data from DappRadar shows that sharky.fi’s MadLads, Frogana and Sharx are the top NFT collections on Solana, which may have contributed to the above achievement.

Source: Santiment

Solana investors need to be worried

Although there were signs of positive growth over the past 365 days, things started to change last month. Data from Cryptoslam shows that SOL’s NFT sales volume fell by more than 36% last month, along with a decrease in the total number of buyers and sellers.

Total NFT transactions also decreased by 11%. Data from Santiment also shows a similar situation, as the number of SOL NFT transactions has decreased significantly in recent times.

Solana investors need to ask important questions as the platform’s NFT metrics decline, while token prices also decline. SOL has experienced a decline of more than 25% in the past month, with a decline of 7% in just the most recent 24 hours. Currently, SOL is trading at 145.55 USD with a market capitalization of more than 65 billion USD, ranking 5th in the list of major cryptocurrencies.

Source: TradingView

This price drop also impacts the token’s social metrics. SOL’s social volume has decreased over the past month, reflecting the token’s loss of popularity in the crypto community.

Furthermore, market sentiment towards Solana continues to be negative for most of the day. This shows that bearish sentiment is dominating the market.

We analyzed the token’s daily chart to see if this bearish trend continues. Both SOL’s relative strength index (RSI) and money flow index (MFI) are falling and moving deeper into neutral territory respectively. Additionally, the token’s price also failed to cross the 20-day Simple Moving Average (SMA), as suggested by the Bollinger Bands.

All of these technical indicators point to the possibility that SOL will continue to decline in the coming days or weeks.