Solana’s On-chain Activity Declines as SOL Price Nears Support

• Solana’s price stabilizes despite decreased trading interest.
• Significant liquidations follow a surge in SOL’s price.
• A decrease in new addresses on Solana’s blockchain raises concerns about its appeal and hampers recovery efforts.

Solana (SOL) faces challenges in managing on-chain activity amidst waning trading interest. Despite this, SOL’s price has stabilized and approached support levels after a recent market downturn.

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In the last 24 hours, SOL experienced a notable surge in price, leading to a flurry of liquidations by sellers. Data from TradingView indicates significant liquidations amounting to $13.2 million in SOL, with a majority of $9.5 million stemming from short positions.

However, concerning trends emerge as well. There has been a marked decline in new addresses on the Solana blockchain. Over the past 15 days, new addresses have dropped by 14.7%, dwindling from a weekly high of 915,000 to 780,000.

Traditionally, a robust increase in new addresses signals a healthy network growth and enhanced utility, factors that typically bode well for Solana’s value. Conversely, the current slowdown in new addresses raises investor concerns about potential challenges such as diminished blockchain appeal, technical hurdles, or competition from rival platforms. Such trends could impede SOL’s ongoing recovery efforts.

Moreover, the decrease in active addresses on the Solana blockchain, from 1.21 million to 1.1 million, poses further challenges for SOL’s price. Reduced user engagement and transaction activity undermine investor confidence, potentially curbing demand for SOL.

Analysts foresee SOL’s recovery facing obstacles as it confronts resistance levels without substantial buying pressure, possibly leading to a reversal for Solana.

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