Solana’s Price Surge Amid Dropping Network Activity
While the daily active addresses on Solana have plummeted by over 80%, the price of SOL has still experienced a remarkable increase of more than 100%. This situation prompts an inquiry into whether the rise in SOL’s price is fueled by market sentiment rather than underlying fundamentals.
The article underscores the warnings from analysts regarding this discrepancy and the reasons for it.
Maksim, the founder of Santiment, remarked that even though SOL’s price is on the rise, network activity—including active addresses and overall network growth—has decelerated.
Since May, the number of daily active addresses has decreased from 6 million to a mere 1 million, with network growth similarly shrinking from 4.9 million to 1 million.
The accompanying chart illustrates a classic bearish divergence: price ascends while on-chain metrics move in the opposite direction.
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Maksim highlighted that historically, this scenario can often indicate a potential trend reversal and may serve as a cautionary note for investors.
“Early data shows familiar patterns. Right now, we’re seeing a classic bearish divergence: price pushing up while network activity lags. Historically, this often signals a trend shift,” Maksim noted.
Santiment’s report mentioned that based on historical trends, such patterns typically lead to a sharp reversal, occurring with an approximate 90% likelihood.
BeInCrypto also highlighted that Solana DEX traders have dropped by 90% over the last year, reflecting decreased demand for tokens within the Solana ecosystem.
Despite declining network activity, SOL’s price has risen from under $100 in April to over $200, according to BeInCrypto.
Several leading asset managers—including Fidelity, VanEck, and Franklin Templeton—have recently updated their Solana ETF filings with the SEC. Analysts now estimate that the chances of approval exceed 90%. Market predictions indicate that a Solana ETF could draw in as much as $8 billion in inflows.
SOL has also been embraced in the trend of strategic crypto reserves. Public companies such as Sharps Technology, Artelo Biosciences, and Ispecimen have accumulated hundreds of millions to develop strategic SOL reserves.
Even with declining network activity, these factors may have contributed to SOL’s upward momentum in the spot market.
