Solana (SOL) Price: Underperforms Altcoin Market With 32% Drop Since November

TLDR

• SOL has dropped 32% since November, underperforming the broader altcoin market which fell 21%
• Solana network fees declined to $4.5 million weekly from $7 million two months ago, while DApp revenue fell 30%
• Competing networks like Base, Arbitrum and Polygon saw transaction growth of 34%, 21% and 89% respectively
• SOL trades below $128 after failing to hold the $134 Fibonacci level, with technical indicators showing oversold conditions
• Bitcoin dominance rose to 59.25% as investors moved away from high-risk altcoins during extreme fear sentiment

Solana’s native token has experienced a sharp decline over recent months. SOL fell 32% since November while the broader altcoin market dropped only 21%.

The token now trades below $128. This marks a break below key technical levels including the 50% Fibonacci retracement at $134.14.

Despite institutional support, SOL continues to struggle. The REX-Osprey SOL+Staking ETF and other US-based Solana ETFs have accumulated $636 million in assets since July.

Multiple companies have added SOL to their balance sheets. Forward Industries, Solana Company and Sharps Technology collectively hold 20.35 million SOL worth over $2.5 billion.

Nearly 68% of SOL’s circulating supply is staked on the network. Total staked SOL increased to 418 million from 410 million two months earlier.

Staking yields exceed 6% as the network remains inflationary. This has helped limit the amount of SOL available for immediate sale.

Falling Network Metrics Signal Weaker Demand

Network activity has declined steadily since August. Weekly transaction fees dropped to $4.5 million from $7 million two months prior.

Decentralized applications on Solana saw revenue fall 30% during the same period. Weekly DApp revenue now sits at $26 million.

Monthly transaction counts increased just 4% on Solana. Ethereum saw a similar 6% gain.

Other networks experienced much stronger growth. Base transactions surged 34% while Arbitrum grew 21%.

Polygon recorded an 89% jump in monthly transactions. Even Tron, a direct competitor, posted a 13% increase.

Competition From Alternative Networks Intensifies

The Ethereum layer-2 ecosystem continues expanding. These networks offer low fees and collectively hold more than $8.5 billion in total value locked.

BNB Chain applications have gained traction. The Aster decentralized exchange and Four-meme memecoin platform benefit from Binance’s marketing reach and developer access.

Technical indicators show continued weakness. The RSI sits at 27.57, indicating oversold conditions.

The MACD histogram remains negative at -0.051. All major moving averages trade above the current price.

The Crypto Fear & Greed Index stands at 22, signaling extreme fear. Bitcoin dominance rose to 59.25% as investors reduced exposure to volatile altcoins.

Bitcoin ETFs recorded $457 million in inflows over 24 hours. Ethereum ETFs saw $22 million in outflows during the same period.

Support levels sit at $122 and $120. A break below these zones could push SOL toward $112 or $105.

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