What Caused 5 July Solana Price Drop?
The Solana price, which had a serious decline yesterday, started to recover today, up 5.83% to $140. The drop in SOL’s trading volume, which fell by 47.55% to $2.4 billion over the course of the last day, confirmed the strength of sell-side activity and correlated with the company’s performance. Its overall market value has surged to $64.70 billion due to the price increase and the lack of trading activity. SOL is still the fifth-largest cryptocurrency, based on data from CoinMarketCap.
3 Reasons Why Solana Price Declined
First of all, the decline in the price of SOL over the past few days is primarily attributable to unfavorable sentiment in the larger cryptocurrency market, which was sparked by the German government’s increased sales of Bitcoin and the anticipated repayments by the now-defunct cryptocurrency exchange Mt. Gox. As per the data from blockchain tracker Arkham, Mt. Gox made its first significant move since May on June 5 by shifting 47,229 BTC, which is almost $2.6 billion, to a new address, adding to the strain.
At this point, sentiment about cryptocurrencies is at its lowest level since January 2023. The market is currently experiencing peak “fear,” as shown by the Crypto Fear and Greed Index, which on July 5th scored 29 out of 100. The continuous decline in cryptocurrency prices, including SOL, can be attributed to investors’ risk-averse behavior as a result of this concern.
After recovering from the FTX collapse, the Solana network has experienced rapid growth in the past year. Numerous projects, including popular meme coins like BONK and Dogwifhat (WIF), were launched as a result of the high development activity marked by airdrops. On the other hand, as fewer people interact with the network, SOL‘s most recent price decline coincides with a decline in on-chain activity.
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