Solana has rebounded sharply thanks to restored buyer interest after holding key support. SOL now trades around $103, up over 8% in a day. The rally followed Bitcoin’s break past $45,500, spurring crypto short squeezes. However, fading on-chain activity hints Solana’s ascent could stall soon, despite bulls currently reigning.
This week’s gains came as relief for holders following Solana’s major mainnet outage that paralyzed the network temporarily. Remarkably, the blockchain operated for nearly a year without significant disruptions beforehand.
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Solana active wallets plunge
But while the price recovery calmed concerns after functionality resumed, on-chain data warns celebrations may prove premature. Metrics show demand declining markedly, with active addresses plunging from 1.02 million to 801,000 recently—a 21% drop, signaling reduced user activity.
Additionally, total fees collected on Solana have descended from $1.21 million to around $581,000. With less revenue accruing to validators, transaction momentum risks slowing. And if buyers fail to offset the slide in fundamentals, sellers may regain sway over SOL’s trend.
Already, the long/short ratio for Solana futures contracts has trended down to 0.73, meaning shorts now command nearly 60% of open interest. This represents a mounting bearish outlook that could soon overpower bulls if headwinds strengthen.
In the near term, how Solana’s price handles overhead resistance around the $107 level should clarify its next move. A break higher would neutralize building bearish pressures, but rejection there may open the door for a retreat back toward the $80 support zone, making a stand earlier this year.
So while optimistic holders breathed a momentary sigh of relief as Solana recovered lost ground, celebrations likely remain premature at this stage. Unless transaction activity stabilizes and buyers reclaim control of the market, this week’s gains could evaporate as quickly as they appeared.
