Key Insights
- Solana has taken a severe beating from the crypto market this week.
- Solana has declined by 25% over the last day and by 56.6% over the previous week.
- Solana’s 7-day implied volatility has spiked to an annual 270% high.
Solana has taken a severe beating from the crypto market following the issues with Sam Bankman-Fried, FTX, and Alameda Research.
Cryptocurrencies connected to the distressed exchange and Bankman-Fried appear to have been the worst hit in the market downturn that rocked Bitcoin and most Altcoins. And of these altcoins, Solana is one of the worst hits.
SOL started to decline this week following reports of Alameda research liquidating its Solana holdings. Since then, the cryptocurrency has dropped by more than 50% to nearly $10.
Data from CoinMarketCap also shows that Solana has declined by 25% over the last day and by 56.6% over the previous week.
Volatility on Solana Hits Record High
Implied volatility is an essential metric for bitcoin and several other cryptocurrencies. It is referred to as the expected price turbulence over a specific time frame.
So far, Solana’s 7-day implied volatility has spiked to an annual 270% high, according to Amberdata. According to the digital assets data aggregator, this metric makes Solana’s annualized implied volatility higher than Bitcoin’s 135%. From a 30-day perspective, Solana’s implied volatility also dwarfs that of Bitcoin, 190% to 95%.
Selling pressure on SOL has spiked as well. As a result, its call-put skew, a measure of the number of short trades to longs, has also dropped to an all-time low of -99%. This indicates that the number of sellers on SOL is also at an all-time high, despite the dip.
Coupled with the extreme selling pressure, Solana’s validators are set to unlock nearly $800 million worth of cryptocurrency into the market.
According to the digital asset information platform, thetie.io, an estimated 32,214,758 SOL is expected to hit the secondary market over the next few days.
Solana’s TVL Drops by 30%
SOL has suffered over the last 48 hours in terms of price and TVL. According to data from DefiLlama, for example, the Solana chain’s TVL has plummeted 31.69% in the last 24 hours and has hit a low of $427 million.
The snapshot of Solana’s slip in TVL above is only the value after normalization. Solana’s TVL dropped by more than 50% in the last 24 hours, leading to this normalized 30% drop.
Solana briefly rose after the reports that Binance may be acquiring FTX but began to fall rapidly after Binance decided against it and cited allegations of consumer fund mishandling.
Marinade finance, the Solana-based Defi protocol, took the biggest hit on the TVL chain, falling 25.54% over the last 24 hours to a TVL of $102 million. Other similarly hit protocols are Radium, Lido, and Solend, with 34%, 43%, and 64% drops, respectively.
Solana (SOL) Price AnalysisÂ
Solana has declined by almost 30% over the last 24 hours and shows no signs of stopping.
The cryptocurrency is far below all its major moving averages and is currently in the oversold zone on the daily chart’s RSI.
The MACD also shows that the bears are heavily in control of the market and that the bulls have a long way to go if they are to have any hopes of retaking the market.
So far, SOL has finally hit a critical zone around the $12.5 level and may see a market reversal if the bulls manage to hold the price at this level against the bears.
If the SOL bulls fail to hold this price level against the bears, the resulting decline would be severely steep, possibly taking the cryptocurrency to the $5 zone.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
