Solana’s network activity has sharply declined in recent weeks. This has resulted in a significant drop in its total value locked (TVL), which has now fallen to its lowest level since the beginning of the year.
The downturn in network engagement has also impacted the demand for SOL, whose price continues to tumble to new lows.
Solana’s User Activity Plummets 35% as Network Engagement Weakens
In the past month, the daily count of addresses that have completed at least one transaction on the Solana network has dropped by 35%. According to Artemis, over the past 30 days, only 4.08 million addresses have visited the Layer-1 network.
When a network sees a drop in daily active addresses, user engagement is reduced. This signals weakening network adoption, declining investor interest, and a shift of users to competing blockchains.
Moreover, this trend results in lower transaction activity, as observed with Solana. Per Artemis, during the period in review, the daily transaction count on the network has reduced by 18%.
As network participation drops, Solana’s ecosystem feels pressure, with liquidity drying up across its decentralized finance (DeFi) protocols. This is reflected by the steady drop in the network’s total value locked (TVL). At press time, Solana’s TVL stands at $6.69 billion, its lowest since the beginning of the year.
A drop in a network’s TVL highlights low investor confidence as users choose to withdraw their funds from the DeFi protocols housed within the blockchain. This trend reduces the network’s available liquidity and puts downward pressure on its native token.
Weakening Demand Threatens Drop Below $120
The demand for SOL is weakening, leaving it vulnerable to further declines if network activity fails to rebound. At press time, the altcoin trades at $124.86, having shed 35% of its value in the past 30 days.
On the daily chart, SOL’s Relative Strength Index (RSI) is in a downward trend at 36.91, confirming the low demand. When this momentum indicator falls below 50, selling activity outweighs buying pressure among market participants.
If selloffs persist, SOL would extend its decline and could fall to the key support floor formed at $120.72. If this level fails to hold, the coin’s price could plunge toward $108.43.
Conversely, a bullish shift in market sentiment could send the coin’s price to $136.62.
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