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Solana price rose 0.3% to $135 during US trading hours on Friday. The selling pressure can be attributed to the large-scale unblocking of SOL, the delay of the US SOL ETF, security vulnerabilities, etc. As the SOL price faces the risk of a long-term correction, other emerging currencies may soon try to replace Solana.
Is Solana losing its edge? 5 reasons why it may soon be replaced
The Solana price daily chart shows a sharp correction from $162 to $132, a 18.7% drop in three weeks. The bearish reversal suggests a continuation of the six-month consolidation trend, and sellers are dominating the current price action. Here are five reasons why Solana could lose its position as the fifth largest cryptocurrency.
Solana ETF Approval Faces Delays
Following the success of Bitcoin and Ethereum ETFs (Exchange Traded Funds) in the U.S. market, cryptocurrency participants expected Solana to be the next best candidate. However, the U.S. Securities and Exchange Commission (SEC) delayed its approval for a number of reasons, including concerns about regulatory compliance and market risks.
In addition, Eric Balchunas, senior ETF analyst at Bloomberg, said
“Yes, the chances of winning in 2024 are almost zero, and if Harris wins, the chances of winning in 2025 are probably almost zero as well. The only hope, in my opinion, is for Trump to win.”
If the SOL ETF’s approval faces a lengthy delay, it could dampen investor enthusiasm, potentially leading to bearish sentiment toward the Solana native cryptocurrency.
Security breaches and scams
This week, Indian cricket fans were targeted by attackers who hacked into a well-known X account and attempted to promote a Solana-based token called “HACKERS.” While the attempt failed to gain traction, the incident raised concerns about the security of the ecosystem.
Such scams could severely affect users’ trust, causing them to switch to more secure blockchains, thus negatively impacting Solana’s price.
FTX/Alameda Unstaking Solana
According to Lookonchain data, over $1 billion worth of SOL has been redeemed from wallet addresses associated with the bankrupt FTX/Alameda. In the past three months, FTX/Alameda has redeemed 530K SOL (worth about $71,000) and transferred it to multiple addresses.
This results in an average of ~176.7K SOL being unstaked per month.
While FTX/Alameda still has $7.06 million SOL ($945.7 million value) locked, continued unstacking could increase selling pressure on Solana’s price.
The emergence of new high-performance blockchains
The emergence of new high-performance blockchains such as Aptos, Sui, and Avalanche is beginning to challenge the dominance of existing networks such as Solana. The next generation of blockchains will facilitate faster transactions, more secure networks, better scalability, and innovative consensus mechanisms.
If other blockchains gain traction, Solana will face stiffer competition, especially with recent delays in ETF approvals, scams, and large shareholder divestments. As a result, decentralized applications (dApps) and projects may migrate to networks with more reliable and better development tools, gradually eroding Solana’s market cap.
Check out the detailed analysis and forecasts in our top 1 crypto article.
Solana Price Risks Major Support Level Collapse
If selling pressure persists, Solana’s price could plunge 22% to challenge the range bottom support level of $105. This rectangular structure, highlighted by two downward sloping trendlines, is driving the current trend of the SOL price.
