Solana's native token, SOL, has seen a notable 21% drop in value over the past week, hitting its lowest point in nearly six weeks. This decline triggered significant liquidations of leveraged long SOL futures contracts, raising concerns about further corrections and the stability of the $130 support level.

Despite the recent downturn, on-chain and derivatives data suggest that investors remain confident in Solana's ability to overcome challenges. However, with SOL's market capitalization appearing inflated compared to other tokens like Avalanche and Tron, questions arise about the sustainability of its premium valuation.

One factor contributing to investor confidence is the rapid growth of Solana's ecosystem, marked by various projects launching their own tokens. The recent integration of Solana's decentralized exchange (DEX) ecosystem with Coinbase's wallet further simplifies trading processes, potentially attracting more users to the Solana network.

While open interest in SOL futures has decreased recently, the funding rate for SOL perpetual futures indicates balanced interest between long and short positions, despite SOL's price drop. However, ongoing network congestion and setbacks in projects like MarginFi have added pressure to SOL's performance.

Despite these challenges, Solana's DApp activity remains robust, with significant increases in volume compared to its competitors. This uptick in activity suggests sustained demand for SOL, both from network usage fees and participation in token airdrops.

Overall, while SOL faces challenges such as network congestion, its solid on-chain activity and investor confidence may help it weather the storm. However, continued congestion could test the sustainability of Solana's premium valuation compared to other blockchain tokens.