The Solana network, once hailed for its robust on-chain activity and rapid growth, is facing challenges as trading interest wanes and on-chain data declines. Recent market turbulence, including a crash that triggered a price correction for SOL, has raised concerns among investors about the sustainability of Solana's upward movement.

Decline in On-Chain Activity Raises Concerns

Data from Coinglass reveals a significant increase in SOL's price over the past 24 hours, accompanied by a wave of liquidations by sellers totaling $13.2 million, with a substantial portion coming from the liquidation of short positions. However, despite this price surge, the Solana blockchain has witnessed a notable decrease in new addresses, dropping by 14.7% over the past 15 days from a weekly high of 915,000 to 780,000.

A decline in new addresses typically indicates reduced network growth and utility, which can adversely affect Solana's value. Moreover, the decrease in the number of active addresses, from a peak of 1.21 million to 1.1 million, suggests declining user engagement and transaction activity, further dampening investor confidence.

Market Outlook for SOL Price

While bulls have managed to maintain dominance in the market, pushing SOL's price to $138, analysts anticipate potential challenges ahead. Resistance near the 200-day EMA at $150 could pose a significant obstacle, with sellers expected to defend against further surges. In the event of a breach, slight support at $116-$120 may temporarily stem selling pressure, but a deeper drop could see SOL's price retreat to $100, delaying the onset of the next upward trend.

Looking Ahead

The future trajectory of Solana's price remains uncertain, with ongoing concerns about declining on-chain activity and its impact on investor sentiment. While bulls aim to regain momentum by surpassing key resistance levels, the potential for further market volatility and technical challenges looms large. As Solana navigates these challenges, investors are advised to exercise caution and closely monitor developments to make informed decisions in the ever-evolving crypto landscape.