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Solana Battling Market FUD, On-Chain Metrics Show Improvement

Solana Battling Market FUD, On-Chain Metrics Show Improvement

Solana (SOL) has been one of the worst-hit crypto assets in the recent FUD that swept across the market. Solana’s woes were heightened by the FTX crisis after it emerged that it shared some ties with the entity.

According to press time data from CoinMarketCap, the cryptocurrency is sitting on a 10% loss over the past seven days. This comes after SOL stabilized a bit from its 12.75% crash on December 16.

Additionally, the NFT space has also been battling bearish sentiment for a while now, with trading volume and the influx of new buyers drying up. According to DeFiLlama statistics, Solana’s TVL has plunged by a gutting 97.4% from its November 9 all-time high of $10.17 billion to a meager $255.6 million at press time.

Source: DeFiLlama

The Raydium Hack

To make matters worse for Solana, a popular DeFi protocol on the network, Raydium, was reportedly hacked on December 16, leading to a loss of about $2 million in user funds. Reports show that the hacker assumed control of the Raydium Protocol owner's authority.

Confirming the attack, the official Raydium Twitter handle tweeted:

“An exploit on Raydium is being investigated that affected liquidity pools. Details to follow as more is known. Initial understanding is owner authority was overtaken by [the] attacker, but [the] authority has been halted on AMM & farm programs for now.”

The latest hack comes after several strings of network interruptions this year. In June, the blockchain recorded its ninth downtime, which resulted in the network being offline for several hours.

It’s Not All Bad News for Solana

Despite the numerous challenges mounted in front of it, data from Messari suggests that the Solana blockchain is notably active with decent on-chain metrics. Citing an example, Messari’s report showed that JumpCrypto was working on a C++ client for Solana’s validator called “Firedancer.” This undertaking will help mitigate the impact of bugs on the network.

Furthermore, on-chain data from Santiment shows that development activity on the Solana blockchain has picked up significantly over the past few weeks, as it returns near October’s peak.

Source: Santiment

Solana’s Price Remains Downcast

Despite the notable resiliency shown by Solana developers, who continue to push development activity on the network to notable levels and boost other on-chain metrics, the price of SOL remains in limbo.

Source: CoinMarketCap | SOL/USD 7-Day Chart

At press time, SOL traded at $12.43 as its correlation with Bitcoin (BTC) strengthened. This is problematic for the cryptocurrency, considering BTC has been having a rough time of late.

Another factor exerting pressure on Solana is the US Federal Reserve and other global central banks.

At the moment, it appears as though Solana’s fate to close the year on a bearish note, thus starting the new year weakly, has been sealed.

SOL Statistics Data

SOL Current Price: $12.44

SOL Market Cap: $4.56B

SOL Circulating Supply: 366M

SOL Total Supply: 536M

SOL Market Ranking: #16

Feeling confident? Trade your idea on SOL now

Disclaimer

This article should not be taken as financial advice. It is essential to conduct research before making any investment decisions.

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