Key Points
- Solana’s (SOL) price has dropped below its realized price level for the first time since March 2022.
- The decrease in SOL’s price coincides with a broader market selloff and a significant drop in Solana’s fee revenue.
Solana (SOL), previously the third-largest token by market cap after Ethereum (ETH) and Bitcoin (BTC), has experienced a significant price drop. On March 11, the price fell below the realized price level, a first in nearly three years.
Technical Level Drop
Blockchain analytics firm Glassnode’s data reveals that the SOL price is currently around 8% lower than the realized price of $134, last seen on March 9. The realized price signifies the average price at which Solana tokens were last moved or bought. When the price falls below this, it may suggest that many token holders are underwater, having paid more for their tokens than their current value.
SOL last fell below this technical level in March 2022, leading to a multi-week slide, with recovery above this level only happening in November 2023. However, there have been instances where the price briefly fell below this metric, such as in November 2020, when it dipped below $2, but then recovered by February 2021.
Market Selloff and Fee Revenue Decline
The future remains uncertain, as SOL’s price decrease coincides with a widespread market selloff. Data from DefiLlama also reveals that Solana’s fee revenue has fallen to around $420,000 per day, a 90% drop since January when SOL was trading at $250. This drop is likely due to the memecoin frenzy.
In October 2023, asset management firm VanEck predicted that Solana could see a 10,000% growth in value by 2030 if the blockchain attracts 100 million users. In its various valuation scenarios, VanEck acknowledged a bearish case where SOL could trade around $9.81. However, it also noted that a bullish scenario could push the SOL price above $3,200 by 2030.