olana’s Momentum Falters After Sharp Market Sell-Off
After riding a three-month wave of gains, Solana (SOL) has come crashing back to earth. The token, which had soared over 37% since July, plunged following Friday’s broader crypto market crash — just as new data revealed a sharp decline in real network usage.
According to analytics platform CryptoQuant, Solana’s daily transactions have fallen by nearly half, from a July peak of 125 million to around 64 million in early October. The decline comes despite a sharp climb in SOL’s price — from $161 to $222 — signaling what experts describe as a disconnect between hype and genuine blockchain activity.
“The divergence between price and on-chain activity is a major red flag,” CryptoQuant warned. “In a healthy ecosystem, rising prices are typically supported by stronger network usage — not the other way around.”
Analysts: Price Driven More by Speculation Than Real Demand
This mismatch, known as negative divergence, occurs when prices rise while network engagement weakens — a pattern often preceding corrections. Solana’s high-speed, low-cost blockchain has long been praised for its strong developer community and vibrant DeFi and NFT ecosystems. Yet, the latest data hints that speculative trading may be overshadowing organic growth.
CryptoQuant’s report adds weight to this theory:
“The steep drop in transaction volume suggests the recent rally was powered more by sentiment and short-term speculation rather than sustainable user demand.”
Institutional Investors Step In
Despite the weak on-chain activity, some analysts see a different driver behind Solana’s price resilience — institutional interest.
Illia Otychenko, lead analyst at CEX.io, told Cryptonews that while user activity slowed, institutional engagement in Solana has surged 670% over the past three months.
“The rally has been largely fueled by traditional finance and institutional inflows, not retail users,” he explained.
The spike coincides with the growing buzz around U.S. spot Solana ETFs, with five filings currently awaiting approval. Meanwhile, Grayscale has added staking options for its Solana ETF — a first for U.S. asset managers — potentially paving the way for broader investor participation once regulatory clearance is granted.
Market Turbulence and Solana’s Volatility
The broader crypto market downturn added fuel to Solana’s pullback. SOL dropped 16% to $185 after U.S. President Donald Trump announced sweeping 100% tariffs on Chinese goods, triggering widespread liquidations across crypto exchanges.
Over 1.6 million traders were wiped out in 24 hours, with losses totaling nearly $19.3 billion — the largest liquidation event in crypto history.
-
Bitcoin (BTC) fell below $105,000 for the first time in five months.
-
Ethereum (ETH) dropped 21% in a single day, to $3,460.
Is Solana’s Growth Sustainable?
Despite the sell-off, Otychenko argues that Solana still shows signs of real growth.
“We’re seeing all-time highs in staking participation — over $14.4 billion — and a $3 billion increase in stablecoin supply,” he said.
However, he warned that organic activity remains weak, with Solana’s overall app revenue down 40% since July. Memecoin trading still accounts for nearly half of the network’s revenue, a sign that much of the growth is speculative rather than fundamental.
What Happens If Activity Keeps Declining?
Analysts caution that if Solana’s on-chain activity continues to weaken, price stability could hinge on external catalysts like ETF approvals, treasury inflows, and general crypto market sentiment.
Dana Love, president of PoobahAI, predicts a 20–30% correction if usage metrics fail to recover:
“If DEX volumes fall below $3 billion daily or fee-paying users drop another 20%, SOL could easily lose $40–60 from its current level.”
Love compared the situation to Solana’s 2022 collapse during the FTX fallout, when network activity evaporated, sending the price down 94%.
The Bottom Line
Analysts agree that Solana’s next phase will depend on whether real adoption can catch up to market enthusiasm.
“These divergences often end one of two ways,” said Otychenko. “Either on-chain demand rises to justify the price — or prices correct to meet reality.”
أخبار متعلقة :