Yesterday, Solana was temporarily halted for over four hours. This triggered a huge sell-off in the native SOL cryptocurrency.
Solana, the fast layer-1 blockchain, dropped 11.1%, and now trades at $39.72 according to CoinMarketCap.
The market capitalization for the ninth largest cryptocurrency, $13.5 billion, is down 84.7% since its record high of $260.06 in November 2021.
Over the past six months, investor wealth worth tens to billions of dollars was wiped out by SOL’s bearish long-term action.
On November 6, 2021, the asset’s market capitalization reached an all-time high at $77.99 billion.
The Solana crash: Unpacking
Today’s bearish price action is due to two main reasons: Yesterday’s blockchain outage and the falling demand for Solana-based, non-fungible tokens ( NFTS).
According to Solana status, yesterday’s outage saw the blockchain endure a downtime of more than four hours. This was the first outage of the month. The previous outage occurred on May 1, 2022.
Over the past three months, the blockchain has not been able to guarantee 100% uptime (a measure that demonstrates availability).
January 2022 was the worst month for the network, with seven days of network outages.
“Cleared all the bots” tweeted Anatoly Yokovenko, co-founder of Solana.
Interest in Solana NFTs fell as a result of the outage. According to Cryptoslam data, Solana’s overall NFT sales dropped by 61.30% and fell to $1.72million.
According to OpenSea data, Okay Bears, the Bored Adopt Ape Yacht Club-like collection of NFT on Solana saw decreased user interest with the 24-hour trading volume falling by 43.40%
Over the same time, trading volumes for other popular NFT collections on Solana, including Trippin’ Ape Tribe and DeGods, also fell at least 40%.
Bitcoin, the most popular cryptocurrency, is down 4.87% and trading at $29,968. Ethereum trades at $1,826, which is a drop of more than 5.5% in the last 24 hours.
