Solana’s On-Chain Activity Wanes: What’s Next For SOL?

Solana Faces Challenges Amidst On-Chain Activity Decline

Solana's on-chain activity has witnessed a downturn, marked by a noticeable decline in new and active addresses.

Despite a recent rebound to $138 with an 11% surge, the sustainability of Solana's price recovery remains questionable. Bulls aim to push Solana above the 200-day EMA at $150, but increased selling pressure at lower support levels could drive prices down.

Diminishing Network Engagement

Over the past 24 hours, SOL's price has seen significant liquidations, with $13.2 million in total liquidations, including $9.5 million from short positions.

The Block's data dashboard indicates a 14.7% reduction in new addresses over the past 15 days, from 915,000 to 780,000. The decline in new and active addresses, which have dropped from 1.21 million to 1.1 million, suggests waning user engagement and transaction activity, potentially eroding investor confidence and lowering demand for SOL.

Analysts express skepticism about the continuation of SOL's price recovery as it nears resistance channels without adequate buying pressure, hinting at a possible reversal.

Market Outlook

SOL currently trades at $138 after an 11% increase in the past day. If bulls can successfully push the price above $150, it could trigger a short squeeze and surprise the bears.

However, if Solana fails to maintain support around $116-$120, selling pressure could intensify, potentially pushing the SOL/USDT pair towards $100, further delaying the onset of a new bullish trend. For bulls to regain momentum, a swift move above $150, targeting the 50-day SMA at $166, is crucial.