Competition is heating up as the number of NFT marketplaces rises. More recent or widespread market developments may have an impact on the Solana NFT ecosystem.
According to data provided by Dune Analytics, the number of people using the Solana NFT marketplace every day has been steadily decreasing since the first week of February.
A lot of money has been made in the NFT business lately, and that means the market is expanding exponentially. NonFungible.com estimated that the NFT market size in 2020 to be over $250 million.
Nonetheless, the NFT market size increased significantly in the first quarter of 2021, reaching over $2 billion.
Solana NFT Ecosystem Deflating?
Yet, Solana’s NFT marketplace has a lot of ground to make up if it is to remain even marginally relevant, let alone competitive.
Like the rest of the market, the network has been on a downward trend as of late. Prices for SOL have been hovering around $23.65, indicating that buying pressure is beginning to ease.
According to the cryptocurrency market cap tracker Coingecko, SOL has lost approximately 3% of its value in the previous 24 hours. Further selling pressure on the market is to be anticipated from this point.
Analysts believe that in order for SOL’s market capitalization of around $9 billion to continue rising, the stock must first break above the $23.20 resistance level, and then the $24.75 barrier level.
What’s The Impact On SOL Price?
The price of SOL has increased by 24% since February 13, and SOL price’s boom has continued unabated despite a decrease in user activity on the Solana blockchain. From the beginning of 2023, the crypto has increased by 163%.
SOL may add to its 2023 gains and maybe see further growth in the first quarter of this year thanks to new optimistic events in is ecosystem.
Solana’s overall NFT trade count and volume have decreased over the past 30 days, reflecting the decrease in Solana’s daily active users as also seen in a graphic provided by Santiment.
Funding Rates Also Down
Similarly, looking at the on-chain data for SOL revealed even greater cause for worry. In the last few days, funding rates on both Binance and DyDx, where SOL is listed, have dropped.
This falling demand is a sign that the derivatives market is slowing down. Furthermore, development activity on SOL has waned in the past week, which is bad news for the network.
Meanwhile, SOL network made a positive announcement about the Helium Network moving to the Solana blockchain.
The Helium Network is a blockchain that uses a decentralized worldwide network of devices as hotspots to connect anything to the internet at a faster and more affordable rate.
SOL total market cap at $8.9 billion on the daily chart | Chart: TradingView.com
Helium Moves To Solana
Around the end of March 2023, Helium will make the switch from its present Layer 1 blockchain to Solana, bringing with it approximately 1 million hotspots throughout the globe as well as the 5G network.
Top 10 Blockchains by NFT Sales Volume Last 30D 🚀
🥇 $ETH @ethereum
🥈 $SOL @solana
🥉 $MATIC @polygon$IMX @Immutable$ADA @Cardano$FLOW @flow_blockchain$BNB @binance@Arbitrum$RON @Ronin_Network$WAXP @WAX_io@cryptoslamio #Solana $SOL pic.twitter.com/ixqKCMREbf
— Solana Daily (@solana_daily) February 22, 2023
Although seeing a drop in the number of daily active users on its NFT ecosystem, the ecosystem maintained a sales volume of $97 million in the last 30 days, placing it second only to Ethereum [ETH] among the top blockchains.
-Featured image from Thuswesee.com