Solana has taken a hit with its price dropping toward key support levels following a sharp drop in the general crypto market. SOL’s weak performance appears to have hamper investors’ sentiment as evidenced by fading activity on the Solana network.
Activity on The Solana Network Declines
Recent heightened volatility in the general crypto market and SOL’s waning price performances have hindered the adoption of the Solana blockchain network. Seasoned technical and on-chain analyst Ali Martinez reported the negative development in a post on the X (formerly Twitter) platform.
This decline reflects investors’ and developers’ fading interest, leading to reduced participation in the blockchain network. With the network activity declining sharply, SOL’s price could be at risk of facing further bearish movements to key levels.
According to the on-chain expert, the Solana network has experienced a significant drop in activity, with on-chain metrics reflecting a notable reduction in active addresses. Data from Ali Martinez’s post shows that the activity on the network has fallen by over 60%.
The 60% drop represents a decrease from an all-time high of 18.5 million active SOL addresses to about 7.3 million active addresses. Such a negative trend has often caused downward pressure on prices if the trend continues.
In another X post, Ali Martinez outlined a waning interest among large SOL investors or holders, usually referred to as whales. Ali Martinez highlighted that these whales have been offloading their holdings in large volumes, triggering worries about increased selling pressure on the SOL market.
Specifically, this trend is spotted among big wallet addresses holding more than 10,000 SOL. On-chain data shows that a total of 135 wallets containing 10,000 SOL have sold or redistributed their holdings. These large investors have been selling their holdings in the past 1 month.
Since the massive selling pressure comes amid broader market fluctuation, it implies that these holders might be adopting a profit-taking strategy or repositioning in anticipation of future price swings. As SOL’s price struggles to hold key support levels, this ongoing sell-off by whales could thwart any attempt for an upward movement in the short term.
Bulls Fighting To Rekindle Upward Momentum For SOL
Even though SOL is facing heightened selling pressure, many analysts believe that prices could gain upside momentum, allowing the altcoin to reclaim key resistance levels. Captain Faibik, a crypto expert and trader recently identified encouraging developments that point to a rally to new all-time highs on the SOL chart.
After examining the monthly chart, Captain Faibik revealed that Solana bulls are having trouble at the critical “Horizontal Resistance.” Once the horizontal resistance is cleared, the analyst expects SOL’s bull run to begin officially. As a result, Captain Faibik is confident that the altcoin might reach the $1,000 mark in the upcoming bullish rally.
