A look at Solana’s state as its price action continues to disappoint

• SOL’s price dipped by more than 6% in the last 24 hours.
• Metrics were suggesting a further price drop, but a few indicators were bullish.

Solana [SOL], in the recent past, launched a one-of-a-kind feature for its NFT ecosystem, which had immense potential. The feature named State Compression reduces the cost of minting 1 million NFTs on Solana to nearly $110. 

Realistic or not, here’s SOL’s market cap in BTC terms

Solana’s latest NFT feature is gaining popularity

For starters, state compression is a way to store data directly on-chain that cuts down on cost by magnitudes of scale. It is already being used by teams across the Solana ecosystem to power large, user-friendly experiences. In fact, Messari’s recent tweet pointed out how a platform hugely benefited from this feature on Solana. 

As per the tweet, Dialect, a messaging platform on Solana, quickly gained popularity by leveraging the platform’s NFT compression capabilities. Dialect demonstrates the potential for consumer applications inside the Solana ecosystem, with a strong retention rate and new partnerships.

Solana NFTs aren’t performing well though 

Though the state compression feature adds value to the blockchain’s NFT ecosystem, things on the ground were different. CRYPTOSLAM’s data revealed that in the last 30 days, SOL NFT sales volume declined by over 45%. Not only that, the number of buyers and sellers also went down by 31% and 26%, respectively.

As per Santiment’s chart, SOL’s NFT trade volume in USD also plummeted. However, the good news was that its total number of NFT trade counts increased sharply last month.

Source: Santiment

SOL investors aren’t elated either

While the NFT metrics dwindled, SOL’s price also registered massive declines. In the last 24 hours alone, the token’s price sank by more than 6%.

As per CoinMarketCap, at the time of writing, it was trading at $18.66 with a market capitalization of over $7.4 billion.

The price decline might continue further as LunarCrush’s data revealed that bullish sentiment around SOL dipped by 44%. Moreover, the token’s Altrank also increased, which is a bearish signal. 

Read Solana’s [SOL] Price Prediction 2023-24

Indicators might favor the bulls soon

Most of the metrics were bearish, but a few market indicators suggested a price uptick. SOL’s Relative Strength Index (RSI) was resting in the oversold zone. The Money Flow Index (MFI) registered an uptick, giving hope for a northbound price movement in the coming days. Nonetheless, Solana’s MACD revealed that the bears were still leading the market, which can be troublesome. 

Source: TradingView