Competition is heating up as the number of NFT markets increases. Newer or widespread market development may have an impact on the Solana NFT ecosystem.
According to data provided by Dune Analytics, the number of people using the Solana NFT market on a daily basis has continued to decrease 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 estimates the size of the NFT market by 2020 to be over $250 million.
However, the size of the NFT market increased significantly in the first quarter of 2021, reaching more than $2 billion.
Solana NFT Ecosystem Deflating?
However, Solana’s NFT market has a lot of ground to work on if it is to remain relevant, let alone competitive.
Like other markets, the network has been in a downward trend of late. Prices for SOL have been hovering around $23.65, indicating that buying pressure is beginning to ease.
According to cryptocurrency market cap tracker Coingecko, SOL has lost about 3% of its value in the previous 24 hours. Further selling pressure in the market should be anticipated from this point.
Analysts believe that in order for SOL’s market capitalization of about $9 billion to continue to rise, the stock must first break above the resistance level of $23.20, and then the barrier level of $24.75.
What is the Impact on SOL Prices?
The SOL price has increased by 24% since February 13, and the SOL price boom continues despite the decrease in user activity on the Solana blockchain. Since the beginning of 2023, crypto has increased by 163%.
SOL can increase its profits in 2023 and it is possible that it will grow again in the first quarter of this year due to new optimistic events in the ecosystem.
Source: Santiment
The number and volume of Solana’s overall NFT trades have decreased over the past 30 days, which indicates a decrease in Solana’s daily active users as also seen in the chart provided by Santiment.
Funding Rates Also Fall
Additionally, looking at the on-chain data for SOL shows more cause for concern. In the last few days, the funding rates on Binance and DyDx, where SOL is listed, have decreased.
This declining demand is a sign that the derivatives market is declining. Furthermore, the development activity on SOL has decreased in the last week, which is bad news for the network.
Meanwhile, the SOL network made a positive announcement about the Helium Network moving to the Solana blockchain.
The Helium Network is a blockchain that uses a network of decentralized devices around the world as hotspots to connect anything to the internet at faster and more affordable rates.
SOL total market cap at $8.9 billion on the daily chart | Chart: TradingView.com
Helium moved to Solana
By the end of March 2023, Helium will switch from its current Layer 1 block to Solana, bringing around 1 million hotspots worldwide as well as a 5G network.
Top 10 Blockchains by NFT Sales Volume Last 30D 🚀
🥇 $ETH @ethereum
🥈 $SOL @solana
🥉 $MATIC @polygon$IMX @Imoh$ AVAILABLE @Kardano$FLOW @flow_blockchain$BNB @binance@Decision$RON @Ronin_Network$WAXP @WAX_io@cryptoslamio # Solana $SOL pic.twitter.com/ixqKCMREbf— Solana Daily (@solana_daily) February 22, 2023
Despite seeing a decline in the number of daily active users in the NFT ecosystem, the ecosystem maintained a sales volume of $97 million in the last 30 days, placing it second only to Ethereum. [ETH] between the top blockchains.
-Featured image from Thuswesee.com