Why Solana Is Going Down: Key Reasons Behind The Downtrend

Why Is Solana Price Down Today: What’s Driving The Red Market?

Why Is Solana Price Down Today?

Solana has registered a 9% decline in the past week, given the weakening crypto market. SOL, Solana’s native token, lowered 3% on Dec. 19 while the market tried to gain back momentum. SOL has been trading 20% below its ATH which stood on Nov. 24.

Marketwide Sell-Off A Contributing Factor

While Solana is not the only one to undergo losses, it’s been correcting with other cryptocurrencies. The drops may have been due to the Federal Reserve chair Jerome Powell’s hawkish comments related to the 2025 economic outlook.

While BTC dropped by 2.7% in the past 24 hours, there are top tokens and midcaps that recorded their worst drops in the recent weeks. Ether also dropped over 4.6% over the last 24 hours to reach the trading value $3,675. 

BNB Chain, XRP, and Dogecoin are among the top-cap currencies that have reduced in price losses, meanwhile. Avalanche reported the highest daily loss among these, going down by 8%.

The whole crypto market has dropped by 3.8% to reach $3.53 trillion.

Decreasing TVL On Solana

Solana’s TVL or total value locked also saw a downtrend. It fell by 4.5% over the last week, going to $8.9B from Dec.12’s $9.37B. This was simultaneous to SOL price decline of over 9% over the same period.

Several layer 2 protocols like Jito and Sanctum also underwent losses, further reducing the overall drop of the Solana network. Solana struggles to attract new users despite lower traction costs.There’s been a decline in onchain activity with its ecosystem. Daily transactions have nearly halved on the blockchain since Nov.20. The daily revenue further reduced to around $1.13M as on Dec.18 from Nov.23’s 12M. 

A Retest of $150?

The relative strength index has dropped below 50, and the bears have all their focus on the support zone. Losing this would see further decline in SOL price.The next logical move could be the psychological level at $150. 

Solana’s ability to recover is, however, considered good enough for the SOL token to “come back to life” before Christmas.