Why is Solana (SOL) price down today?

The price of Solana's native token, SOL SOLUSD, has fallen 3.45% in the last 24 hours to reach approximately $143.50 on June 15. This underperforms the broader crypto market, whose valuation has dropped by around 1.5% in the same period.

Top catalysts driving the SOL price lower these days include an outperforming layer-one blockchain rival, Ether ETHUSD, and stagnant inflows into the Solana ecosystem.

Solana suffers as Ethereum steals the limelight

SOL's price is falling due to a broader crypto market correction. However, the cryptocurrency is underperforming the market amid the increasing odds of regulatory approvals for spot Ether exchange-traded funds (ETFs) in the United States.

Related: Ethereum ETF launch date depends on issuers, not SEC — Gensler

For instance, the widely-tracked SOL/ETH pair has dropped 22.65% since May 20, when the U.S. Securities and Exchange Commission (SEC) contacted Ether ETF applicants to update their 19b-4 filings.

The Ether ETF news further coincides with Solana's declining market dominance. Since May 20, SOL's crypto market share has fallen from 3.30% to 2.82% while ETH's crypto market share has risen from 15.78% to 18.04%.

Moreover, CoinShares' weekly report reveals Ether investment vehicles attracting $68.9 million in the week ending June 8, much higher than Solana's $0.7 million inflows in the same period.

 These metrics indicate a relatively higher interest in ETH among compared to SOL, contributing to its price decline today and in recent weeks.

Solana network usage is declining 

Today's decline in SOL's price corresponds with a stagnant total value locked (TVL) metric across the Solana ecosystem. What's more, Solana's leading projects by TVL, namely Jito, Marinade, and Kamino, have witnessed modest declines in their SOL reserves in the last 24 hours.

The simultaneous decline in SOL's price and project reserves likely reflects caution from investors, possibly due to anticipated market downturns led by external factors. For instance, SOL's price decline this week coincided with a rising U.S. dollar index, indicating a depleting risk appetite.

SOL's price drop today further succeeds a sharp decline in the decentralized exchange users on its blockchain, calculated on a daily timeframe. 

As users leave the DEXs or the ecosystem, they might sell off their SOL holdings. This increased selling pressure, without a corresponding increase in buying demand, typically drives the price down.

SOL price in technical correction

From a technical standpoint, SOL's price decline today is part of a technical correction that started on June 6, when it retested its multi-week descending trendline as resistance. The SOLUSD pair has dropped by over 18% since.

As of June 15, SOL was testing its multi-month ascending trendline support for a potential rebound toward its 50-day exponential moving average (50-day EMA; the red wave) at around $158.65—up circa 13.50% from the current price levels—by June's end.

Conversely, a break below the trendline support risks a decline toward the 200-day EMA (the blue wave) at around $129.50.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.