5 Reasons Why Solana Might be Dethroned Soon

The Solana price is 0.3% to $135 in the U.S. Trading session on Friday. The overhead selling pressure can be attributed to major SOL unstacking, delay in U.S-based  SOL ETF, Security Vulnerabilities, etc. With the SOL price at risk of prolonged correction, other emerging currencies could attempt to dethrone Solana soon.

Is Solana Losing Its Edge? 5 Reasons It Could Be Dethroned Soon

The Solana price daily chart shows an aggressive correction from $162 to $132— an 18.7% decrease within three weeks. The bearish reversal signals the continuation of a six-month consolidation trend and the dominance of sellers to drive the current price movement. Here are five reasons SOL could lose its position as the 5th largest cryptocurrency.

Solana ETF Approval Faces Delays

Following the success of Bitcoin and Ethereum ETFs(Exchange-Traded Fund) in the U.S. market, the crypto participants expected Solana to be the next best candidate. However, the U.S. The Securities and Exchange Commission (SEC) has delayed its approval for several reasons, including concerns over regulatory compliance and market risks.

Furthermore, the senior ETF analyst at Bloomberg, Eric Balchunas, stated

“Yes, near-zero chance in 2024, and if Harris wins, there’s probably near-zero chance in 2025, too. Only hope IMO is if Trump wins.”

If the approval of SOL ETF faces prolonged delays, it could dampen investor enthusiasm, potentially leading to bearish sentiment toward Solana’s native cryptocurrency.

Security Vulnerabilities and Scams

This week, Indian cricket fans were targeted by attackers who hacked a prominent X account and attempted to promote the Solana-based token ‘HACKERS”. While this attempt failed to gain traction, the incident raised concerns about the ecosystem’s security.

Such scams could strongly affect the user’s trust and shift them toward more secure blockchains, negatively affecting Solana price.

FTX/Alameda Unstaking Solana

According to Lookonchain data, the bankrupt FTX/Alameda-linked wallet address has unstaked over $1 billion worth of SOL. In the past three months, FTX/Alameda has unstaked 530K SOL (worth approx $71k) and transferred it to multiple addresses.

This has resulted in an average unstaking of around 176.7K SOL per month.

While FTX/Alameda still has $7.06M SOL ($945.7M worth) locked, continuous unstaking could increase selling pressure on Solana price.

Over $1B worth of $SOL is being unstaked by FTX/Alameda!

In the past 3 months, FTX/Alameda has unstaked 530K $SOL($71K) and transferred it to multiple addresses, averaging 176.7K $SOL($23.5M) unstaked per month.

FTX/Alameda still has 7.06M $SOL($945.7M) staked.… pic.twitter.com/lhfVDsEc99

— Lookonchain (@lookonchain) September 13, 2024

Emergence of New High-Performance Blockchains

The emergence of new high-performance blockchains, such as Aptos, Sui, and Avalanche, is starting to challenge the dominance of existing networks like Solana. The next-generation blockchain boosts faster transactions, secure networks, better scalability, and innovative consensus mechanisms.

If the other blockchain gains traction, Solana will face increased competition, especially with the recent ETF approval delay, Scams, and unstacking from large holders. Thus, the decentralized applications (dApps) and projects may migrate to networks with more reliable and better-developing tools, gradually diminishing Solana’s market cap.

Check out the detailed analysis and prediction in our Top layer-1 crypto article.

Solana Price Risk Major Support Breakdown

If selling pressure persists, the Solana price could plunge 22% to challenge the $105 coinciding with range bottom support. This rectangle structure, highlighted with two downsloping trendlines, drives the current movement in SOL price.

The daily Relative Strength index below 50% accentuates the seller’s holds an upper hand. Therefore, a potential breakdown below the $105 floor could signal a major correction in Solana price prediction and bolster other blockchains to dethrone Solana.

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Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.