The Solana network was shut down for more than four hours yesterday, leading to a large SOL token price drop.
Solana price has fallen by more than 85%
The Solana price dropped by 11.1% and is currently trading at $39.72. The market capitalization of the token is now around $13.5 billion. This means that the project has lost almost 85% of its value since November 2021. Indeed, back then the price of 1 SOL token was around $260. The prolonged losses have wiped out tens of billions of dollars in assets over the past six months.
What is the reason for the Solana crash?
The two main reasons behind today’s bearish price action revolve around the blockchain outage that occurred yesterday and the sharply declining demand for Solana-based NFTs.
Yesterday there was an outage of more than four and a half hours on the blockchain. It was the first outage in the past month; the previous outage occurred on May 1, 2022. The blockchain has struggled to provide 100% uptime (a measure of availability) for the past 3 months.
Amid the disruption, interest in Solana NFTs declined. According to data from Cryptoslam, total NFT sales on Solana fell by 61.30% to $1.72 million.
The NFT collection called Okay Bears was made on the Solana network. Interest in this NFT collection fell by more than 43% in recent days, OpenSea data shows.
Trading volumes of other popular NFT collections on Solana, including Trippin’ Ape Tribe, DeGods and FatCats Capital, also fell by at least 40% over the same period. All in all, 2022 has been a dramatic year for Solana investors.