Is SOL about to crumble? Major NFT projects plan to switch to other blockchains
Over the previous 24 hours, the sentiment of the cryptocurrency market as a whole was mixed, as the majority of the top cryptocurrencies experienced mixed price changes.
Solana is in a difficult position, as two of the ecosystem’s most prominent NFT projects are leaving their network for rivals. The outlook for the crypto remains bearish in 2022.
On Monday, DeGods announced that the NFT collection will bridge to Ethereum in the first quarter of next year. y00t’s NFT collection, which is part of the same cohort, will move to Polygon.
The official explanation for the transition to these blockchains has not been announced.
Image: The Crypto Times
What happens to SOL?
Due to bearish signal readings and unfavorable news, the crypto price may resume its free fall towards $10.
Strong bearish momentum allowed the bears to push the price below the $12.00 threshold.
At the time of writing, SOL was trading at $11.16, down 6.5% in the past seven days, data from Coingecko shows. The crypto’s price has retreated by 23.15% since December 15.
Nevertheless, the bulls established support at the level, which stabilized the price activity. Regardless, bearish pressure persists as it continues to decline, but at a much slower rate.
Concerns about crypto’s exposure to cryptocurrency exchange FTX increased as cryptocurrencies took a hit this year and stock performance fell.
Image: Business2Community
Glory Days No More
SOL’s price fell by about 90% in 2022 after being a sparkling gem in 2021. It has fallen from a high of $260 to today’s price of $11.16.
Solana established itself as a frontrunner in the rapidly growing field of decentralized finance (DeFi), a key application area for blockchain technology. At its peak, DeFi’s total value locked (TVL) topped $12 billion.
Although Solana is considered the second largest NFT ecosystem in the world, developers and projects are leaving the network.
According to data provided by DappRadar, the ecosystem’s NFT marketplace ranks fourth in terms of trading volume.
The departure of DeGods and y00ts from the ecosystem is expected to drop the coin completely out of the top 10 in terms of sales volume.
SOL total market cap at nearly $4.06 billion on the daily chart | Chart: TradingView.com
What now ‘Ethereum Killer?’
There is speculation that both projects requested funding from the Solana Foundation to continue on the blockchain, although this has not been proven.
Solana is a blockchain platform that competes with Ethereum.
The proof-of-stake (PoS) system on which it was founded is both faster and less burdensome on the environment than Ethereum’s.
And while Ethereum can only process 20 transactions per second, Solana can process thousands.
Meanwhile, the price of SOL risks falling to the weekly and monthly lows of $11.00 and $10.90, respectively. If the “Ethereum Killer” breaks out of its downtrend and closes above the trendline, the bearish narrative may be invalidated.
