SOL Price Awaits SEC Verdict as Solana (SOL) Network Activity Resilience Counters Bearish Sentiment

Solana's native token, SOL, last closed above $220 on Feb. 1 and is currently trading 32% below its all-time high of $295 from Jan. 19.

Solana’s native token, SOL, has been trading below a key technical level for over two weeks, and onchain metrics now suggest that traders have become more pessimistic about the cryptocurrency's price.

SOL’s price last closed above $220 on Feb. 1, and it has since dropped by 32% from its all-time high of $295 on Jan. 19. The cryptocurrency currently trades at $200, according to Binance.

Traders’ sentiment has worsened, according to SOL derivatives metrics, while the latest decline in Solana network activity could further dampen the odds of reclaiming bullish momentum.

Solana onchain activity drops by 28%

Onchain transaction volumes for Solana declined by 28% in the seven days ending Feb. 10, totaling $31.8 billion, according to DefiLlama data.

The slowdown in decentralized exchange (DEX) activity likely signals the end of the recent memecoin frenzy, which peaked with the Official Trump (TRUMP) token launch on Jan. 19.

Solana’s onchain volumes drop 28% in the past 7 days, closely tracking declines in BNB Chain, Ethereum, Sui, and Polygon total volumes. (Dune Analytics)

Memecoin trading slump and declining fees weigh on SOL price

The drop in trading interest has also weighed on token prices, creating a negative feedback loop for SOL as lower fees reduce incentives for staking.

In the memecoin sector, Dogwifhat (WIF) is down 160% over 30 days, Goatseus Maximus (GOAT) corrected 67%, MooDeng (MOODENG) lost 69%, Peanut the Squirrel (PNUT) dropped 72%, and Just a Chill Guy (CHILLGUY) declined 75%. For comparison, Bitcoin (BTC) gained 2% over the same period.

Among Solana’s decentralized applications, notable declines include a 47% drop in trading volumes on Orca and Phoenix and a 27% decrease in Raydium activity over the seven days ending Feb. 10.

However, it would be inaccurate to single out Solana as similar trends were observed across other blockchains.

The 28% drop in Solana’s onchain volumes aligns closely with declines in competing networks, including BNB Chain, Ethereum, Sui, and Polygon.

This suggests that the correction in memecoin prices and reduced DEX activity were not exclusive to Solana.

Solana’s onchain transaction volumes closely follow those of BNB Chain, Ethereum, Sui, and Polygon. (Dune Analytics)

Solana’s funding rate remains negative

To assess whether SOL traders have turned more bearish, the perpetual futures funding rate serves as a key indicator, reflecting leverage demand imbalances.

Typically, long positions (buyers) pay funding fees for leverage, and a negative rate signals a more pessimistic market outlook for SOL.

Data shows that SOL’s funding rate has remained mostly negative since Feb. 2, following its price drop below $220. This indicates weak demand from leveraged buyers.

However, this is not necessarily a bearish signal for SOL, as investors appear to be reacting to lower network activity and fees rather than betting against the token or anticipating a major negative event.

Solana’s perpetual futures funding rate has been mostly negative since Feb. 2, indicating weaker demand from leveraged buyers. (Coinglass)

Solana’s TVL remains steady

Solana’s total value locked (TVL) remains at 46.5 million SOL, largely unchanged from the previous month.

In comparison, Ethereum’s TVL grew 9% in ETH (ETH) terms over the past 30 days, while BNB Chain saw a 4% decline in BNB-denominated (BNB) deposits.

This suggests that Solana is holding its ground relative to its competitors.

Solana’s total value locked has remained steady over the past 30 days, while Ethereum’s TVL grew by 9% and BNB Chain saw a 4% decline. (DeFiLlama)

Solana second to Ethereum in key metrics

Alex Svanevik, CEO of blockchain analytics firm Nansen, noted that Solana has surpassed Ethereum in several key metrics, including active addresses, transactions, volumes, and fees.

He pointed out that TVL remains the only area where Solana lags, though the gap has narrowed significantly over the past year.

Despite new entrants like Aptos and Sui, Solana has consolidated its position as the second-largest blockchain ecosystem.

Additionally, investors speculate that SOL could attract further institutional inflows if the US Securities and Exchange Commission approves a Solana spot exchange-traded fund (ETF).

Reportedly, Bloomberg analysts currently assign a 70% probability of