Solana’s SOL token plunges 79% YTD
Token affected by network outages and overall bearish market
SOL faces resistance at $36
Solana is an open-source blockchain project aimed at supporting decentralized applications. The network uses a hybrid consensus model comprising the proof-of-history and proof-of-stake algorithm.
Founded in 2017 by Anatoly Yakovenko and Greg Fitzgerald, Solana has been keen on making its transactions scalable and low-cost. Its developers cited the slow transactions in PoW networks and how its timestamp technology could solve the drawbacks.
Solana’s popularity surged in 2021 when it was poised to be the ‘Ethereum killer.’ However, the blockchain now seems to be a shadow of itself. Aside from the crypto crash in the first half of 2022, Solana has suffered numerous network outages. The challenges have shaken the confidence of its community driving value downwards.
SOL drops 79% year-to-date
According to the year-to-date price outlook, Solana has plunged 79% since trading at $173. The sell-off has also seen the token tank 86% since peaking at $258 in 2021, according to data from CoinMarketCap. SOL’s market capitalization has then decreased from $77 billion to $12 billion.
Solana’s total value locked is currently at $2.61 billion at #5 behind Ethereum, BSC, Tron, and Avalanche as per Defi Llama. Ethereum and BSC have $47.43 billion and $6.23 billion in TVL, while Tron and Avalanche have $5.3 billion and $2.7 billion, respectively.
SOL meets resistance at $36 (4-hour chart)
Source: TradingView
From the 4-hour chart above, SOL has found resistance at $36. The token is, however, showing some bullish momentum having moved from $32. The MACD indicator is also bullish. The latest data from CoinMarketCap shows that SOL is currently trading at $35.79, after a surge of 5.81% in the past day and a jump of $2.93% in the past week.
Summary
Although Solana seems to be losing popularity, traders can still benefit from the short-term gains. The recent network outages and the overall bearish sentiment are some factors affecting SOL price. A surge above the $35 resistance can usher in some bullish momentum, and the $42 will be the next resistance to watch.
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