Solana (SOL) hit a fresh monthly low after a significant price drop, mimicking the bearish trend across the broader cryptocurrency market.
Solana was trading at $135 on June 18 at 08:31 a.m. EST after a 5.3% drop in the last 24 hours. SOL has been among the worst-hit coins in the ongoing altcoins crash, with an 11% weekly dip.
Solana Slides Further
On June 17, SOL was trading at $150. However, selling activity across the crypto market has seen the token drop to its lowest level in one month. According to Coinglass data, the dip has vaporized $15 million in long positions.
Solana’s price decline has also reduced its market cap from $76 billion to $61 billion. By this metric, SOL currently ranks as the fifth largest cryptocurrency. SOL will likely fall to $110 or lower if the price decline continues.
According to one analyst, SOL is currently in a correction phase that could lower the price to test support at $116.
Solana is currently in a correction phase within a broader consolidation range. If price falls below $127, it may retest the significant support level at $116
If SOL can break the $157 resistance level, it could move towards the next target at $188 pic.twitter.com/guB7Uld3xP
— LaCryptoLycus
(@CryptoLycus) June 18, 2024
Before the recent price dip, SOL was among the top performers in the crypto market this year. The token peaked at a yearly high of $202 on March 8. It has since failed to reclaim the $200 price level.
As Solana’s price continues to struggle, the network faces resistance as it competes against other blockchain networks, especially layer 2s.
Solana Network Faces Fierce Competition
The Solana network is experiencing high competition from layer one networks. Arthur Hayes, co-founder and former CEO at BitMEX, noted that Solana will not be a leading base-layer decentralized application in the next one to three years.
Hayes endorsed the Aptos layer-one chain, saying it would likely become a market leader. Aptos is yet to emerge as a leading Solana competitor, as its TVL currently stands at around $328 million.
Besides layer-one networks, Solana is also facing competition from Ethereum layer-two ecosystems.
Data from DeFiLlama shows that Solana ranks second after Ethereum in terms of weekly on-chain volumes. Solana’s 7-day volumes stand at over $9 billion. However, layer-two and layer-three networks such as Arbitrum and Base are fast catching up.
Base Chain saw $4.8 billion in volumes last week, while Arbitrum’s stood at $3.4 billion. According to L2Beat, layer two networks currently have a TVL of over $42 billion.
