Solana Continues Its Freefall

Solana has been on a freefall since the collapse of FTX and has not been able to move upwards because of the FUD (fear, uncertainty and doubt) surrounding the ecosystem and its connections with the former crypto exchange.

According to recent news, Solana’s native token SOL has dropped 51.14% since the day FTX fell from grace. 

Solana: Dead Or Not Dead? 

The current situation might be confusing to investors. Based on data by CoinGeko, the token shot up by 5.4% in the past 24 hours which might be a signal that investor sentiment is reversing. However, the FUD still remains strong around the ecosystem itself. 

Messari released an overview of the ecosystem back on December 15. The basic gist of the overview was that Solana is still a solid ecosystem even after the collapse of the Sam Bankman-Fried-led exchange.

However, recent Santiment insight on the ecosystem shows that it might be already dead. 

The most notable on-chain development for the token was the significant drop in developer activity despite a lot of projects being developed on the ecosystem.

Although it is difficult to say whether Solana as a whole is dead or near it, it is easier to say that the ecosystem is struggling to keep itself afloat because of its close ties with FTX. 

Image: Coincu News

What This Means For Holders Of SOL

The crypto community seems to be very bearish at the moment considering what transpired in the past weeks courtesy of some major macroeconomics news, including the spate of job cuts and bankruptcies by big crypto firms.

Those who are bullish for the ecosystem point to ETH’s crash back in 2018 and how SOL’s movement mimics this. 

For everyone that sold #ETH in 2018 for 88 USD and for everyone who is selling $SOL sub 10 USD!

Fundamentals haven’t changed and Solana isn’t FTX!

Just sayin! 🫡 pic.twitter.com/IBYzldEaBd

— MANDO CT (@XMaximist) December 29, 2022

MANDO CT, a self-declared crypto expert, said the above on his pinned tweet.

Others try to refute the claim that Solana only blew up with the help of Bankman-Fried’s dirty money with documents which show SBF supporting competitors of Solana. 

SOL total market cap at $3.5 billion on the daily chart | Chart: TradingView.com

However, SOL’s price movement reflects investor sentiment on the token itself – fear, uncertainty, and doubt:

• fear that the ecosystem would inevitably follow the path of FTX.
• uncertainty on what 2023 will bring for Solana.
• doubt regarding the ecosystem despite the amount of projects being worked on top of it. 

However, with several big developments like Solana Pay and the nearing launch of its own mobile phones, we might see 2023 to become a crucial part of Solana’s recovery, or a further catalyst of its downfall. 

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Featured image: Cryptopolitan