Solana experienced a 9% drop on January 18, falling to $91.40, continuing a retreat from the $100 level over the past 15 days. This decline coincides with the broader crypto market’s inability to maintain a total market value above $1.6 trillion throughout 2024, suggesting the downturn should not be alarming.
The Solana ecosystem saw a rally in December 2023, fueled by interest in Solana SPL token airdrops, including Jito (JTO), BONK, and Dogwifhat (WIF). These events boosted demand for the Solana Saga Phone, but BONK and JTO faced corrections of 15% and 19%, respectively, on January 17-18.
Overoptimism due to airdrop expectations contributed to Solana’s recent correction. Some launches took longer than expected, while others provided only temporary boosts to decentralized applications (DApps), with interest fading post-announcement. Analysts and influencers listed promising opportunities, yet most tokens failed to achieve significant value or volume.
A social media post by ‘IcedKnife’ highlighted anticipated Solana ecosystem launches, including Kamino and Jupiter. Optimism for Solana’s performance is partly driven by growth in decentralized finance (DeFi) deposits within the Solana Network.
Solana’s Total Value Locked (TVL) peaked at 15.4 million on December 19, 2023, indicating a 60% growth from the previous month, but has since stabilized around 14 million. Despite a 8.5% decline in transactions and active DApps users over the last seven days, Solana leads with 72.3 million total transactions, attributed to its lower costs, though its $594 million DApps volume is significantly less than BNB Chain’s and Polygon’s.