Solana price has been rocky over the past two weeks but user activity on the network continues to increase.
Solana's (SOL) native token, SOL, has experienced a 9.8% decline between Jan. 30 and Feb. 1, failing to break above the $104 resistance for the fifth time in four weeks. When considering a longer time frame, SOL dropped by 10.7% in 30 days, while Ether (ETH) and BNB (BNB) traded down 1.2% and 2.6%, respectively, during the same period. This leads investors to question the reasons for SOL’s underperformance, especially given the solid network fundamentals.
From a broader perspective, the cryptocurrency market has been under pressure since the Jan. 31 decision by the U.S. Federal Reserve (Fed) to keep interest rates unchanged at 5.25%. The central bank also noted that the target range should remain unchanged until there is "greater confidence that inflation is moving sustainably toward 2%." Investors fear that the crisis in U.S. regional banks could accelerate as these institutions are severely pressured due to their fixed-income portfolios yielding below the current interest rate.
Shares of New York Community Bancorp (NYCB), which purchased the collapsed crypto-friendly Signature Bank in 2023, have dropped 42% since Jan. 30 after reporting a $260 million loss in the fourth quarter of 2023. In March 2023, Signature Bank officially shut down and was subsequently taken over by the New York Department of Financial Services (NYDFS). The contagion risk has caught the attention of traders and investors, such as BitMEX co-founder Arthur Hayes.
