Solana Price Decline Amidst Shifting Volumes to Tron Following SunPump Launch

Solana Price Decline Amidst Shifting Volumes to Tron Following SunPump Launch

Solana’s price has faced significant pressure in recent weeks as trading volumes have shifted to Tron, following the launch of the SunPump platform. This shift, described by some Solana enthusiasts as a ‘vampire attack,’ highlights the intense competition between the two networks. Tron founder Justin Sun has further fueled this rivalry by announcing plans to leverage the meme coin industry to boost Tron’s usage. The result has been a noticeable reallocation of trading volume, bringing attention to the diverging trajectories of Solana and Tron.

Solana Price Slumps After SunPump Introduction

A ‘vampire attack’ in the crypto world refers to a tactic where one blockchain or decentralized protocol seeks to drain users and liquidity from a rival network. This scenario played out on August 13 when Justin Sun introduced SunPump, a Tron-based counterpart to Solana’s highly popular Pump.fun.

In the days following the launch, SunPump witnessed a massive influx of users and trading volume, causing the SUN token to skyrocket in value. Meanwhile, TRX, Tron’s native token, experienced a significant price surge, surpassing both Cardano (ADA) and Toncoin (TON). In contrast, Solana’s price began to decline, reflecting broader struggles in terms of user activity, transaction volume, and network fees.

Data from Dune Analytics reveals that Solana’s total fees and Jito tips have plummeted by over 50% since Sun replicated Pumpfun on Tron. Notably, a significant portion of Solana’s revenue had been driven by priority fees and MEV tips. If Solana’s active users, often referred to as ‘degens,’ continue to migrate to Tron, the revenue generated from these fees could dwindle to near zero.

Previously, Solana had been generating an average of $1 million per day in fees. However, following the SunPump launch, this figure has struggled to reach $500,000 daily.

Solana Price Analysis

Entering September, Solana’s price remained under pressure, hovering around $134 and marking a nearly 25% decline over the course of August. Despite this downturn, technical analysis suggests that the SOL price remains within a 187-day consolidation range. The asset has tested the lower boundary of this range five times, indicating a solid support level.

On the upside, resistance at $200 appears relatively weak, having been tested only once. However, stronger resistance lies just below this level, around $180, with another weaker resistance at $160.

Price predictions for Solana suggest that if the asset can break through the immediate resistance at $160, it could rally to $180 and potentially reach $200, representing a potential gain of over 50% from its current price. However, if bearish pressure breaks the strong support at $120, Solana’s price could fall further to $80.