Solana’s native token, $SOL, has faced a notable decline of 9% over two days following its peak of $161.80 on September 29, marking its highest price in seven weeks.
The recent downturn in $SOL’s price is said to be as a result of fluctuations in the cryptocurrency market, with many tokens experiencing corrections after recent highs which also affected Solana’s price as well.
Ethereum continues to gain traction, especially with the anticipation of regulatory approvals for spot Ether exchange-traded funds (ETFs) in the U.S. This development has shifted investor focus towards Ethereum, leading to a decrease in interest in Solana. Since May 20, the SOL/ETH trading pair has dropped by approximately 22.65%.
Solana’s market dominance has also been waning. Since May 20, $SOL’s market share has fallen from 3.30% to around 2.82%, while Ethereum’s share has risen from 15.78% to 18.04%. This shift indicates a growing preference among investors for Ethereum over Solana.
The decline in $SOL’s price is further compounded by stagnant network activity within the Solana ecosystem.
Key projects on the Solana blockchain, such as Jito and Marinade, have seen minimal changes in their SOL reserves, suggesting that overall activity within the ecosystem remains low.
A significant reduction in users on decentralized exchanges (DEXs) operating on Solana has been observed. As users exit these platforms, they often liquidate their SOL holdings, increasing selling pressure without a corresponding rise in buying demand.