Solana's (SOL) Price Plummets 3% Amidst Market Corrections

Solana's (SOL) price has been on a downward trend, with a 3% decrease on Jan. 29, as the broader cryptocurrency market experiences corrections. The native token of the Solana network is currently trading at $231, which is 23% below its all-time high of $294 reached on Jan. 19. Several factors contribute to Solana's bearishness, including a market-wide sell-off ahead of the US Federal Reserve's decision on interest rate cuts, decreasing investor interest in its decentralized finance (DeFi) ecosystem, and weakening technicals that point to deeper losses, with bears eyeing a $182 SOL price.

Solana's price drop is preceded by a decrease in the total value locked (TVL) in its DeFi applications, as per data from DefiLlama. Solana's TVL has been in a downtrend since Jan. 19, falling by 10% over the last 10 days from $12.9 billion to $11 billion at the time of publication. Several layer 2 protocols, such as Jito and Raydium, have posted 4% drops in TVL over the last seven days, respectively, contributing to the drop in the value of the underlying network. The declining TVL reflects traders' waning interest and could indicate that Solana is struggling to attract new users.

Solana's bearishness is also evidenced by a decline in on-chain activity within the Solana ecosystem, according to data provided by Dune dashboard pump.fun. SOL's price drop on Jan. 29 was preceded by a sharp drop in the number of network transactions. The amount of daily transactions on the Solana blockchain has dropped from an all-time high of 71,738 on Jan. 23 to 59,076 on Jan. 28, indicating suppressed network activity and less overall user interaction with the platform, resulting in lower revenues from fees.

From a technical standpoint, today's losses in SOL signify the invalidation of the altcoin's breakdown of a bull flag triggered by a market downturn in the wider crypto market. Solana's price drop below $235 on Jan. 28 saw it drop below the lower boundary of a bull flag, flipping into resistance. If this resistance line holds, SOL may drop