Solana Plummets Double-Digits Amid Another Network Halt

Solana (SOL), the speedy layer-1 blockchain, shed 11.1% and currently trades at $39.72, according to data from CoinMarketCap. 

The ninth-largest cryptocurrency with a market capitalization of $13.5 billion is now down 84.7% from its all-time high of $260.06 recorded back in November 2021. 

The long-term bearish action on SOL wiped out tens of billions of dollars of investor wealth over the past six months. 

The asset's market capitalization hit an all-time high of $77.99 billion on November 6, 2021.

Unpacking the Solana crash

The two primary reasons behind today's bearish price action revolve around the blockchain’s outage that happened yesterday and the plummeting demand for Solana-based non-fungible tokens (NFTs).

Yesterday, the blockchain battled through an outage for more than four and a half hours, according to Solana status. It was the first outage in the past month, with the previous outage occurring on May 1, 2022.

The blockchain has struggled to provide 100% uptime (a measure of availability) over the past 3 months.  

The network faced its worst outage in January 2022, crashing the network every day for seven consecutive days.

“Cleared out all the bots” tweeted Anatoly Yakovenko, the co-founder of Solana after fixing the latest outage.

Amid the outage, interest in Solana NFTs also plummeted. Per data from Cryptoslam, the overall NFT sales on Solana dropped by 61.30% to $1.72 million. 

Okay Bears, the Bored Ape Yacht Club-like NFT collection on Solana showed decreased user interest, with the 24-hour trading volume dropping by 43.40%, according to data from OpenSea.

Trading volumes of other popular NFT collections on Solana including Trippin’ Ape Tribe, DeGods, and FatCats Capital also dropped at least 40% over the same period of time.

As for the leading cryptocurrencies, Bitcoin is down 4.87% in the last day and is trading hands at around $29,968. Ethereum is trading at $1,826, a drop of over 5.5% over the past 24 hours.