Solana (SOL) Stalls Despite Surging Network Activity—When Does the Rocket Ignite?

Solana’s network buzzes like a beehive—transactions pile up, devs deploy, yet SOL’s price sticks to the runway. What gives?

Metrics scream bullish: user growth spikes, NFT volumes rebound, and DeFi TVL creeps upward. But the token? Flat as a pancake since Q1.

Traders whisper about ’macro headwinds’ while secretly eyeing leverage. Institutional money lurks—always one Fed pivot away from flooding in.

Here’s the cynical kicker: maybe SOL’s just waiting for Bitcoin to moon first. Altcoins love riding coattails when Wall Street remembers crypto exists.

Bottom line: Network fundamentals say ’buy.’ Price action says ’watch the damn charts.’ Pick your poison.

TLDR

• Solana price dropped 10% after rejection at $185, now trading around $162-167
• Network maintains second-largest TVL at $11 billion with strong DEX volume growth
• 3.55 million SOL tokens worth $600 million set to unlock between June-August
• Memecoin prices declining sharply with TRUMP down 24% and POPCAT down 20%
• MEV issues and validator concerns creating technical challenges for the network

Solana price failed to maintain momentum above the $180 resistance zone. The token currently trades around $162, marking its lowest level in over a week.

The recent selling pressure began when SOL faced rejection at the $185 level on May 23. Since then, the price has dropped approximately 10% and broken below several key technical levels.

Trading data shows SOL moved below the $170 support level and the 100-hourly simple moving average. The token briefly touched a low NEAR $160 before attempting a modest recovery wave above $165.

Technical indicators paint a bearish picture for the short term. The hourly MACD is gaining pace in the bearish zone while the RSI has fallen below the 50 level. A connecting bearish trend line has formed with resistance at $170 on the hourly chart.

Network Fundamentals Remain Strong

Despite the price decline, solana maintains its position as the second-largest blockchain by total value locked. The network currently holds $11 billion in TVL, representing a 14% increase over the previous month.

Decentralized exchange activity on Solana has been particularly robust. Over the past 30 days, trading volume on Solana’s DEXs reached $94.8 billion, surpassing Ethereum’s $64.8 billion in onchain activity.

The network generated $48.7 million in fees over the past 30 days, compared to Ethereum’s $36.9 million. This occurred despite ethereum having a larger deposit base, highlighting Solana’s efficiency in capturing value from onchain activity.

Individual protocols have shown mixed performance. Raydium posted 48% growth in deposits while Marinade saw a 28% increase in TVL. However, growth was more modest across other applications like Jupiter, Kamino, and Drift.

Token Unlock Concerns

A major factor weighing on investor sentiment is the anticipated unlocking of 3.55 million SOL tokens between June and August. These tokens are valued at approximately $600 million at current price levels.

Market analysts note that most of these tokens were acquired from the bankrupt FTX/Alameda estate at around $64 per token. This cost basis potentially limits selling pressure but still represents increased supply hitting the market.

The token unlock schedule comes at a time when Solana’s supply expands at an annualized rate of 5.2%. Although the network offers an 8% yield for validators, the net staking return remains lower than yields offered by many DApps on stablecoin deposits.

Memecoin Weakness Adds Pressure

The decline in Solana-based memecoin prices has created additional headwinds for SOL. OFFICIAL TRUMP (TRUMP) dropped 24% over the past seven days, while FARTCOIN and POPCAT both lost 20%.

Pudgy Penguins (PENGU) fell 17% during the same period. The sustained weakness in these tokens raises questions about the long-term viability of the memecoin ecosystem on Solana.

A continued drop in DEX activity related to memecoin trading could further pressure SOL’s performance, given the network’s reliance on transaction fees for revenue generation.

Technical and Structural Challenges

Solana faces ongoing concerns about MEV (maximum extractable value) issues. Dan Robinson, a researcher at Paradigm, has identified MEV as Solana’s “biggest problem.”

The network’s high throughput comes with trade-offs regarding validator incentives. Validators can increase earnings by reordering transactions, which enables sandwich attacks and front-running practices that harm regular traders.

Looking at immediate price levels, SOL faces resistance near $169-170 with the main resistance at $180. On the downside, initial support sits at $162 with major support at $160.

A break below $160 could send the price toward $155, and further weakness might target the $142 support level. Conversely, a successful break above $180 could open the path toward $185 and potentially $200.

Current market conditions show SOL trading at $162.06 with bearish technical indicators suggesting further downside risk in the near term.