Solana (SOL) Price Loses Strength As Altcoins Collapse

Solana (SOL) price is gaining a bearish momentum after a substantial upward rally. SOL crypto recently showed good strength amid a sideways BTC price action. However, the bears started to claw back in as the BTC failed to break out of the narrow trading range.

After a 5.11% pullback on Tuesday, SOL price is once again trending lower. At press time, the native asset of the Solana ecosystem is changing hands at $23.33 after another 2.33% drop. Most other altcoins are also experiencing increased selling pressure. Technical analysis suggests cryptocurrency Solana may drop more before a potential rebound.

SOL Crypto TVL Increases More Than 50%

The whole Solana ecosystem had to face negative press after the collapse of FTX exchange last year. Alameida Research was the biggest backer of the innovative smart contract platform. Therefore, the bankruptcy of FTX and its subsidiaries triggered a massive sell-off in SOL, tanking its price to $7.77 in December 2022.

During this time, the total locked value (TVL) also shrunk on the Solana blockchain, plummeting from its $10B peak to a mere $205M. Nevertheless, there has been some improvement in the network activity since the start of 2023. The TVL has now recovered to $317 million, translating into a 55% increase from the December 2022 lows.

Is Solana A Good Investment?

Most crypto analysts believe Solana has already established itself as a major player in blockchain space. While Solana price is currently 91% down from its 2021 all-time highs, there hasn't been any compromise on the development. It is still one of the most innovative blockchains with a few shortcomings.

Solana also appears to have gradually distanced itself from FTX and Same Bankman Fried. These factors point towards a bright future for SOL crypto, which faced a lot of negative publicity last year. Nevertheless, Solana is still not a no-brainer investment like Ethereum and Bitcoin. The project has some serious issues, like network downtime and scalability, which need to be fixed for a sustainable growth.

Solana Price Prediction For The Coming Months

A look at the following daily chart reveals that SOL price is getting rejected from the $26-$27 supply zone repeatedly. This supply zone is also acting as the highest point of the current trading range. The following chart reveals the regions of support and resistance on the daily chart of Solana.

For Solana price prediction to flip bullish on a higher timeframe, it needs to gain strength above $27. This would open the doors for a major upside rally targeting the swing highs of $48. However, such a positive price action can only be expected if BTC breaks above the $31,500 level in the coming weeks. Currently, SOL seems to be heading for another retest of the range lows, which is around $20.31.

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