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Solana\u2019s native token, SOL<\/a>, is down 4% amid minor corrections across the broader crypto market.\u00a0<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a> shows SOL trading at $137 after failing to hold above $140 on March 27.<\/p>\n SOL\/USD daily chart. Source: Cointelegraph\/<\/em>TradingView<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n Key factors driving the SOL prices lower today include:<\/p>\n A drop in network activity and total value locked.<\/p>\n<\/li>\n A classic bearish technical setup.<\/p>\n<\/li>\n<\/ul>\n SOL\u2019s price drop today is preceded by a drop in the total value locked<\/a> (TVL) in its DeFi applications.\u00a0<\/p>\n Key points:<\/p>\n Solana\u2019s TVL has been experiencing a downtrend since mid-January.\u00a0<\/p>\n<\/li>\n This metric dropped by 45.5% from $12.1 billion on Jan. 19 to hit four-month lows of $6.4 billion on March 11.<\/p>\n<\/li>\n This drop in TVL occurred in tandem with the decrease in SOL\u2019s price, which is more than 53% down over the same period.<\/p>\n<\/li>\n Although this metric experienced a slight increase to $7.2 billion on March 25, it is now down 2% over the last three days.<\/p>\n<\/li>\n<\/ul>\n Solana total value locked. Source: <\/em>DefiLlama<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n SOL\u2019s price drop on March 27 was also preceded by a sharp decrease in the network\u2019s DEX activity.\u00a0<\/p>\n<\/li>\n The chart below shows Solana\u2019s DEX trading volume \u2014 the total value of crypto trades executed on decentralized platforms on the Solana blockchain<\/a> \u2014 dropped from an all-time high of $39.9 billion on Jan. 19 to the current level of $2.3 billion.\u00a0<\/p>\n<\/li>\n<\/ul>\n DEX trading volume on Solana. Source: Blockworks Research<\/em><\/p>\n<\/figcaption><\/figure>\n Solana\u2019s decrease in TVL and DEX trading volume reduces the demand for the SOL token, pushing prices down.<\/p>\n SOL trades 56% below its all-time high of around $295<\/a>, established on Jan. 19, and the technical setup shows that the altcoin could drop further toward the mid-$50s.<\/p>\n Key points:<\/p>\n SOL is trading within a bear flag<\/a> pattern, indicating the possibility of continuing with the downward momentum if key support levels don\u2019t hold.<\/p>\n<\/li>\n The bear flag developed after Solana\u2019s rejection from the $270 resistance level to a 12-month low of $112 between Jan. 19 and March 11.<\/p>\n<\/li>\n The consolidation within the bear flag has SOL trading in an ascending parallel channel, with the latest drop testing critical support levels, including the lower boundary of the flag at $132.<\/p>\n<\/li>\n<\/ul>\n Edit the caption here or remove the text<\/em><\/p>\n<\/figcaption><\/figure>\n \u00a0<\/strong>A breakdown of this level could trigger another price crash.<\/p>\n<\/li>\n The bear flag\u2019s downside target, derived from the height of the previous drop, is approximately $55, representing a 60% decline from the current price.<\/p>\n<\/li>\n<\/ul>\n However, popular crypto analyst Jelle remains optimistic about Solana\u2019s ability to recover from the downtrend and stage a sustained recovery.<\/p>\n Jelle said<\/a> that SOL has made a solid recovery from the range lows at $112 but admitted that the price still has \u201ca lot of ground to recover.\u201d<\/p>\n As Cointelegraph reported, SOL has the potential to recover<\/a> as long as its network\u2019s TVL and fees fliop bullish, particularly in comparison to competitors.<\/p>\n\n
Decreasing network activity hurts SOL price\u00a0<\/strong><\/h2>\n
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Will SOL price drop to $55?<\/strong><\/h2>\n
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