Solana Dropped 30% in 24 hours, Here’s What Happened

Paigambar Mohan Raj
Source: Coinpedia

The crypto market is taking one of its hardest hits at the moment. The global crypto market cap has fallen to $865 billion, down by 8.9% in the last 24 hours. Bitcoin (BTC) the original crypto, has fallen below the $17k mark, while Ethereum (ETH) has gone below $1200. Almost all major crypto projects are in the reds. Solana (SOL) was hit particularly hard, going down by 31% in the last 24 hours.

Furthermore, Solana’s has fallen by 50.8% in the last seven days. The token’s price has fallen from $38.03 on November 5th, to $15.38 at press time. SOL reached an all-time high a year ago, on November 6th, 2021, hitting $259.96. The price has fallen by 94.2% since then.

Source: Coingecko

According to the data on DefiLlama, Solana’s TVL (total value locked) has fallen to $436.1 million, a drop of 30.40%.

Source: DefiLlama

Additionally, Solana’s decentralized lending and borrowing protocol, Solend, has also witnessed a fall in its TVL.

According to DefiLlama, Solend’s TVL currently stands at $46.25 million, falling from $255.3 million.

Source: DefiLlama

Why did Solana crash?

The cascading effect began with the Binance-FTX episode, leading to the fall of one of the most popular exchanges in the world, FTX. When Binance began selling its FTT holdings, FTX started to sell its assets to deploy more capital. Now FTX had big investments in Solana. FTX chief, Sam Bankman-Fried had even stated that Solana was one of the most underrated cryptos. In order to deploy more capital, a large amount of Ethereum (ETH) and Solana (SOL) was consequently sold. FTX reportedly held $1.2 billion worth of SOL in its coffers.

With Binance pulling out of the acquisition deal, and no funding in sight, it seems FTX’s days are limited, leaving the crypto community in a state of shock. No one had expected an exchange as big as FTX to go under. Mistakes were made, calculations were underestimated, and now, as always, the general public will suffer. Many speculate that Solana could potentially go to zero.

At press time, Solana (SOL) was trading at $15.14, down by 0.8% in the last hour. FTT on the other hand was trading at $2.34, up by 5.2% in the last hour, but down by 47.9% in the last 24 hours.