• The cryptocurrency market slides due to ETF-linked institutional sales, causing major tokens like Solana and Avalanche to drop over 20% weekly.

• Solana’s SOL experiences a rapid decline, losing 8.98% in 24 hours and more than 17% weekly, raising concerns about its growth trend.

The cryptocurrency market has recently witnessed notable price declines, impacting major tokens like Solana (SOL) and Avalanche (AVAX). This slide is primarily attributed to institutional sales linked to recently launched exchange-traded funds (ETFs). Bitcoin (BTC), the flagship cryptocurrency, has not been immune to this trend, with prices witnessing a drop of more than 20% for some tokens over the past week.     

Solana (SOL) in Bear Territory 

Solana (SOL), one of the prominent cryptocurrencies, has seen its value plummet over the past week. In the last 24 hours alone, SOL experienced a 7% decline, adding to its woes. This price drop has reversed gains from a December rally driven, in part, by meme coins within the Solana ecosystem.

The current market structure paints a gloomy picture for SOL as it continues to decline faster than many of its counterparts. Data from Crypto News Flash reveals a 24-hour drop of 7%, bringing SOL’s price down to $80.51. These daily losses have accumulated over 12% for the week, indicating the persistent sell-off trend.

Solana’s performance over the past year has been remarkable, with the cryptocurrency reaching a yearly high of $125.19. However, in 2023, it recorded nearly a 700% growth year-on-year (YoY), raising concerns as its downward spiral persists. The Solana bubble has burst, and long-term investors have seized opportunities to secure profits following the surge.

Avalanche (AVAX) Faces Bearish Influence

Avalanche (AVAX), another prominent cryptocurrency, has also encountered a challenging market environment. The token has experienced a 9% decline in the past 24 hours and a cumulative loss of over 22% in the past week. This decline is indicative of a bearish trend dominating the AVAX market.

Recent data from Artemis paints a bleak picture for Avalanche’s C-Chain, showing a substantial drop in demand over the past month. Unique wallet addresses in on-chain transactions on the C-Chain have dwindled by over 45% within this 30-day period.

The consequences of reduced user participation on the C-Chain are evident in transaction counts. With only 266,820 transactions completed in the past month, the daily transaction count has plummeted by 95%. 

Decentralized exchanges (DEXes) hosted on the Avalanche blockchain network have not been immune to the downturn either. The total volume of transactions conducted through these DEXes has dwindled by 53% in the past month. This sharp reduction underscores the broader hesitancy among users to engage with decentralized financial instruments on the network.

Market Uncertainty and Investor Sentiment

The recent market performance of both SOL and AVAX reflects the prevailing uncertainty in the cryptocurrency space. While these tokens had witnessed impressive growth trends in the past, the current bearish sentiment indicates a shift in investor sentiment.

The impact extends to meme coins within the Solana ecosystem, including BONK, which has fallen by 10%, and JOE, the token of Avalanche-based decentralized exchange Trader Joe, which has dipped by 12%. These tokens now face heightened selling pressure as investors adopt a more cautious stance.