SOL price dropped today as Solana-based tokens plummeted significantly and the bearish divergence in RSI suggests that the correction may not be over.
Solana's native token SOL down $218.36 amid a significant correction in the cryptocurrency market and liquidations exceeding $1 billion, down 5.5% on December 10.
Data from Cointelegraph Markets Pro and TradingView shows that SOL's trading price is 17% lower than the all-time high of $263 set on November 24.
Cryptocurrency, DApp, market, cryptocurrency exchanges, decentralized exchanges, market analysis, Solana
XRP/USD daily chart.
Let’s take a closer look at the factors that led to the drop in SOL prices today.
Market sell-off drags down SOL price
Due to an overheated market and Bitcoin's failure to maintain above $100,000, Solana has experienced a pullback along with other cryptocurrencies, which have also declined.
Bitcoin down $97,668, Bitcoin price remains relatively unchanged, down 2%, while top tokens and mid-caps saw significant declines, recording their largest drop in months during the Asian trading session on December 10.
Ethereum has dropped over 4.6% in the past 24 hours, trading at $3,735.
Cryptocurrency, DApp, market, cryptocurrency exchanges, decentralized exchanges, market analysis, Solana
24-hour performance of top cryptocurrencies: other top cryptocurrencies, including Binance Coin from the BNB Chain, at $702.59.
XRP down $2.25
Dogecoin down $0.4127 has also seen significant drops in the past 24 hours.
TRX down $0.278 is the largest single-day drop among the largest market cap cryptocurrencies, down 13.8% today.
Similarly, the total cryptocurrency market cap has dropped 4.5% in the past 24 hours, now standing at $3.46 trillion.
Alex Kuptsikevich, chief market analyst at FxPro, stated in response to today's cryptocurrency market adjustment: 'Bitcoin's failure to stabilize above $100,000 may have suppressed overall market buying.'
Bitcoin's inability to grow has negatively impacted altcoins. Solana-based tokens showed bearish sentiment on December 10 as token prices built on its network continued to pull back. As shown in the chart, most tokens experienced daily losses.
Cryptocurrency, DApp, market, cryptocurrency exchanges, decentralized exchanges, market analysis, Solana based on the performance of Solana-based tokens.
Additionally, the total market capitalization of all Solana-based tokens dropped from $361.8 billion on December 9 to $342 billion on December 10. The total trading volume in the past 24 hours increased by 137%, intensifying seller activity.
Investors may have reacted negatively to the decrease in token values and market activity within the Solana ecosystem, leading to a decline in SOL prices. According to data from the Dune dashboard pump.fun, this coincides with a drop in on-chain activity within the Solana ecosystem. Prior to today's drop in SOL prices, the number of network transactions had sharply decreased.
Since November 20, the daily transaction volume on the Solana blockchain has nearly halved. Cryptocurrency, DApp, market, cryptocurrency exchanges, decentralized exchanges, market analysis, SoL.
This indicates that network activity is suppressed, with overall user interaction with the platform decreasing, leading to reduced fee income.
Additional data from Dune shows that Solana's daily revenue has sharply declined, currently at 12,361 SOL (approximately $2.7 million) on December 9, down from the year-to-date high of 55,832 SOL (approximately $12 million) on November 23.
The market structure of SOL suggests a retest of $180.
The decline in SOL today precedes the widening bearish divergence between its price and the relative strength index (RSI) within the daily time frame.
The price of SOL reached a series of higher highs between April and November. However, during the same period, its daily RSI declined, forming lower highs.
According to technical analysis rules, divergence between rising prices and falling RSI indicates a weakening current upward trend, prompting traders to sell more at local highs.
Cryptocurrency, DApp, market, cryptocurrency exchanges, decentralized exchanges, market analysis, Solana seems to reflect the situation when SOL price surged to an all-time high, leading to overbought conditions on November 22, when the daily RSI reached 77, prompting profit-taking.
Bears are currently focusing on the immediate support level of $210, followed by the previous resistance level, which has flipped to a support level at $200.
A daily closing price below this level will confirm the continuation of the downtrend. The next logical move would be the psychological level of $180, which is a 16% drop from the current price.
