Solana Network Faces Reduced On-Chain Activity
The Solana network is struggling to maintain its on-chain activity as trading interest declines. Recent market conditions triggered a significant crash, leading to a price correction for SOL. This correction brought the value of SOL toward crucial support levels. Despite a rebound in SOL’s price, investors are concerned about its sustainability due to continuous low on-chain activity.
Decline in New and Active Addresses
In the past 24 hours, the price of SOL saw a substantial increase, leading to significant liquidations by sellers. Data from Coinglass indicates that there were $13.2 million in SOL liquidations, with approximately $9.5 million coming from short position liquidations.
The Block’s data dashboard highlights a significant decrease in new addresses on the Solana blockchain. Over the past 15 days, the number of new addresses dropped by 14.7%, from a weekly high of 915,000 to 780,000.
A decline in new addresses can be concerning for network growth and investor sentiment. Typically, an increase in new addresses signals a healthy blockchain, suggesting strong utility and interest. A slowdown in this metric could imply several challenges, such as reduced appeal, technical issues, or heightened competition from other blockchains.
Additionally, the number of active addresses on the Solana blockchain fell from a peak of 1.21 million to 1.1 million, further adding to investor concerns. This decline could impact SOL’s price, as reduced user engagement and transaction activity may lower demand.
What’s Next for SOL Price?
Despite the concerns, the recent recovery in SOL price indicates that bulls are maintaining control. Bears failed to stop a rebound at $120, suggesting that upward momentum remains. Bulls are currently pushing the SOL price towards its crucial resistance near the 200-day EMA at $150. However, sellers are expected to defend this trend line aggressively.
As of now, SOL trades at $138, a surge of over 11% in the last 24 hours. If bulls can maintain this momentum and push past the 200-day EMA, a short squeeze could occur, with SOL potentially targeting the 50-day SMA at $166.
On the other hand, a break below the $116-$120 support level could accelerate selling pressure, potentially dragging the SOL/USDT pair down to $100. This would likely delay the onset of the next upward trend.
