Solana token down double digits as NFT growth plummets

As Solana’s Breakpoint event comes to an end, so has the token’s bullish price action.

Despite news that Google Cloud would start driving one Solana validator, the token that supports the fast layer-1 blockchain has plunged by double digits.

The so called Ethereum Killerits native token, SOL, has fallen nearly 12% in value over the past 24 hours, according to data from Coingecko.

Solana is a proof-of-stake (PoS) layer-1 blockchain that offers many of the same operations as Ethereum, including decentralized finance (DeFi) applications and non-fungible tokens (NFTs).

SOL fell from $36.29 to $31.02 early Monday morning. It has since staged a modest rally to $31.80 at press time. Trading volumes also saw a 19.22% decline to $2.77 billion in the same period.

Today’s bearish price action wiped out Solana’s weekly gain, sending it down 4.2% for the week. SOL is still down 87.8% from its all-time high of $259.96, set a year earlier.

Over $8.37 million of Solana futures positions were liquidated in the past 24 hours, per data from Coinglass. The majority of liquidations (85.14%) came from blown long trades.

Green bars indicate blown long trades. Source: Coinglass.

With a market cap of nearly $11.29 billion, SOL is now the 10th largest cryptocurrency after losing its long-held position before Elon’s favorite crypto, Dogecoin.

What draws Solana?

SOL’s recent bearish price action comes amid a decline in Solana-based NFT volume. NFTs played a significant role in blockchain’s success early this year.

According to data from Nansenreturning NFT buyers on Solana reduced significantly to levels not seen since November 2021. Returning NFT buyers indicate investors’ increasing interest in the network.

On the flip side, first-time buyers have also fallen to 6,097 buyers yesterday compared to 17,090 buyers on 28 October 2022.

Beyond return and first-time buyers, overall Solana NFT transactions have also decreased significantly over the past four weeks.

Transactions reached an all-time high of 650,000 during the second week of September. Since then, however, its value has been in freefall, with the network processing approximately 160,000 NFT transactions as of November 7.

Although Solana has been the hardest hit, the broader crypto market has taken a heavy hit over the past 24 hours.

The industry’s market capitalization has fallen by more than 3% to just over $1.02 trillion over the same period.

Leading assets i Bitcoin (BTC) and Ethereum (ETH) has also lost 2.52% and 3.87% respectively in the last 24 hours.