Due to a drop in trade interest, the Solana network is finding it difficult to sustain on-chain activity.

The recent collapse in the cryptocurrency market caused SOL's value to correct downward and approach support levels.

Even though SOL's price eventually increased, investors are worried about if this rising trend will last given the ongoing poor on-chain statistics.

There Is A Decline In New And Active Addresses In Solana

Over the last twenty-four hours, there has been a notable surge in the price of SOL, which has led to a big selling wave. According to Coinglass data, there were $13.2 million in SOL liquidations in total, with the liquidation of short positions accounting for almost $9.5 million of that total.

According to the Block's data dashboard, the Solana blockchain has seen a notable decrease in new addresses recently. Over the past 15 days, the number of new addresses fell by 14.7%, dropping from a weekly high of 915,000 to 780,000

Typically, a robust influx of new addresses is a sign of healthy network growth and increased utility, which in turn can boost Solana’s value.

Conversely, a slowdown like the current trend can trigger concerns among investors, as it might reflect issues such as declined appeal of the blockchain, potential technical challenges, or increased competition from other blockchain platforms. Thus, SOL price might struggle in its ongoing recovery efforts

Additionally, the decrease in the number of active addresses on the Solana blockchain, from a peak of 1.21 million to 1.1 million, further impacts the SOL price negatively. This decline suggests declined user engagement and transaction activity, which can weaken investor confidence and potentially lower the demand for SOL.

Analysts anticipate that the current recovery in SOL price may soon stall as it approaches resistance channels without sufficient buying pressure, potentially leading to a reversal for Solana.

What’s Next For SOL Price?

The inability of bears to halt a rebound at $120 for Solana indicates that bulls continue to dominate the market.

Bulls continue to break above immediate Fib channels and push the SOL price toward its crucial resistance near 200-day EMA at $150.

However, sellers are expected to strongly defend a surge above that trend line. As of writing, SOL price trades at $138, surging over 11% in the last 24 hours

On the bearish hand, there is slight support at $116-$120, yet if this threshold is breached, the pace of selling may intensify, potentially driving the SOL/USDT pair down to $100. A deeper drop might delay the onset of the next upward trend.

Bulls must rapidly push the price above the 200-day EMA, which is now around $150, in order to restore momentum. Aggressive bears can be caught off guard by this move and may initiate a brief squeeze. The pair may then go for the 50-day SMA, which is around $166.