Solana’s price has taken a hit today as the ongoing cryptocurrency market sell-off continues, driven by disappointing US economic data. The price of Solana (SOL) dropped by as much as 5% to an intraday low of $127 on September 6, reflecting broader market weakness. As of now, SOL is trading at $129.18, down 2.5% in the past 24 hours, with weekly losses of around 8%.
Bearish Sentiment Grips the Crypto Market
The main factor behind SOL’s recent decline is the prevailing bearish sentiment in the wider crypto market. Recent US labor market data has intensified concerns among investors. August’s job figures came in below expectations, with only 142,000 new jobs added, compared to the 160,000 forecast. The unemployment rate, however, fell to 4.2%, aligning with expectations.
SOL/USD daily chart. Source: TradingView
The job numbers have taken on heightened importance as they could influence the US Federal Reserve’s decision on interest rates at their upcoming September 18 meeting. The market’s reaction has been cautious, with the Crypto Fear & Greed Index hitting a low score of 22, indicating “extreme fear” among investors.
Declining Network Activity on Solana
Beyond the broader market downturn, Solana’s own network activity has seen a decrease, further contributing to the price drop. Data from DeFiLlama shows that Solana’s Total Value Locked (TVL) on its network has fallen by 12% over the past ten days. Daily transactions on the Solana blockchain have also dropped significantly, from over 20,000 to just 2,635 in the same period.
Crypto Fear & Greed Index. Source: Alternative.me
This decline in network usage reflects waning interest and adoption, leading to reduced demand for SOL, which in turn has negatively impacted its price.
Technical Signals Point to Further Declines
From a technical perspective, Solana’s price is still in a downward trend. The cryptocurrency has been in a correction phase since March, having fallen over 39% since reaching its multi-year high of $209. Currently, SOL is testing a key support level, and a break below could lead to further declines, with analysts predicting a potential drop to $75, a 41.5% fall from its current level.
