Solana is one of the worst-performers amongst the top 10 cryptocurrencies by market cap.
The cryptocurrency market continues to experience a mixed performance. Bitcoin and the other leading cryptocurrencies are either down by less than 1% or up by the same margin.
However, SOL, the native token of the Solana ecosystem, is down by more than 3% over the past 24 hours. Thus, making it the worst performer amongst the top 10 cryptocurrencies by market cap.
A crucial catalyst behind SOL’s current poor performance is the decline of the decentralized finance (DeFi) activity on the blockchain. Over the past five months, Solana’s DeFi activity has dropped by roughly 50%.
According to DeFiLlama, in November, the total value locked (TVL) on the Solana blockchain reached $15 billion.
However, this has reduced by more than 50% and currently stands around $6.7 billion. Solana has lost some of its market share to the likes of Terra and Cardano.
Key levels to watch
The SOL/USD 4-hour chart is currently bearish as Solana has lost more than 3% of its value in the last 24 hours. However, the technical indicators show that Solana is currently recovering from its ongoing slump.
The MACD line is below the neutral zone, indicating a bearish sentiment for Solana. The 14-day relative strength index of 59 shows that Solana has left the overbought region following its poor performance.
At press time, Solana is trading at $86.2 per coin. If the bulls regain control of the market, SOL could break past the first major resistance level of $94 before the end of the day.
However, if the bearish trend continues, SOL could drop below the first major support level at $80 over the next few hours.