Key Takeaways:
-
Solana's strong on-chain metrics and DApps revenue dominance suggest long-term strength, despite recent selling pressure from large holders.
-
Solana ETF inflows and diversified on-chain activity support SOL, but macroeconomic risks in AI and trading remain key obstacles to a recovery around $250.
Solana's native token, SOL (SOL), fell 6% after flirting with $172 on Monday. The decline largely reflected a decline within the Nasdaq index, which got here under pressure after CoreWeave (CRVW US) cut its cloud services revenue forecast and reports emerged that China plans to ban the US military from access to its rare earth minerals. Is there a probability for SOL to recapture $250 within the near term?
SOL/USD (blue) vs. altcoin market cap (red). Source: TradingView / Cointelegraph
SOL has underperformed the altcoin market by 7% over the past two weeks with no clear trigger for the decline. In fact, the environment has been quite encouraging, marked by the debut of a Solana spot exchange-traded fund (ETF) within the US and a major increase in Solana on-chain activity.
Network activity on Solana has surged over the past 30 days, with lively addresses increasing by 10% and transactions increasing by 8%. In comparison, Ethereum saw 5% fewer lively addresses and a 26% decline in transactions over the identical period. Hyperliquid, an emerging competitor within the decentralized exchange (DEX) space, also saw a 28% decline in on-chain activity.
Solana continues to dominate decentralized application (DApps) revenue. No other network comes close, giving Solana a sustainable competitive advantage. These DApps reward users by sharing a portion of their earnings as yield, a mechanism that helps the network attract more deposits and strengthen its position.
Solana’s growth shows greater diversification across multiple sectors
Solana’s total value (TVL) currently stands at $12 billion, widening the gap to BNB chain, which holds $8 billion. Over the past 30 days, several projects have posted strong gains, including a 35% increase on Securitize (Real World Assets), a 31% increase on Solstice USX (Basis Trading), and a ten% increase in deposits on Meteora (Liquidity Pools). This data suggests that Solana's growth is increasingly diversified and fewer depending on a single sector.
Memecoin adoption and trading activity were once the predominant drivers of Solana's user growth and network fees, but that momentum slowed in March. While the token has now recovered from its 2025 low of $95, traders remain cautious about its near-term upside potential.
Since debuting on US markets on October 28, spot Solana ETFs have attracted $343 million in net inflows. Meanwhile, the REX-Osprey SOL + Staking ETF has gathered a further $286 million in assets. However, the general positive impact of those instruments was partially offset by outflows from corporations reducing their SOL holdings.
Galaxy Digital Holdings' (GLXY) sale of 439,621 SOL has raised concerns concerning the sustainability of Solana's corporate reserve strategy. Forward Industries (FORD) holds the biggest position at 6.82 million SOL, a number that has remained stable over the past 30 days, in response to CoinGecko data.
The chances are high still good that SOL will outperform the broader altcoin market, supported by Solana's regular growth in on-chain activity and its dominance in DApps revenue. However, the trail towards $250 will likely rely on a decline in risks related to the synthetic intelligence sector and an easing of geopolitical tensions related to the continuing global trade war.
This article is for general information purposes and will not be intended to constitute, and shouldn’t be construed as, legal or investment advice. The views, thoughts and opinions expressed herein are those of the writer alone and don’t necessarily reflect the views and opinions of Cointelegraph.
