Solana’s native token, SOL (SOL), fell 22.5% from January 6 to 13, testing the $169 level for the first time in 10 weeks. A 15% recovery was then achieved by January 15th, but SOL price was unable to rise above $200, and traders were concerned that a return to $230 could be hindered in the near term by the decline in decentralized application (DApp) activity on the Solana network. I have concerns that there is.
Solana’s 7-day on-chain transaction activity (USD, billion). source: Dipilama
Despite leading on-chain volume, Solana’s network activity fell 10.3% between January 8 and 15, according to DefiLlama data. Negative performers included Raydium (down 23.3%) and Orca (down 2%). On the positive side, activity at Lifinity increased 27.7% and Stable increased 29.7%.
Meanwhile, Ethereum saw its on-chain volume increase by 9% and Arbitrum activity by 20% over the same period. Ethereum’s growth was driven by Curve Finance, Pendle, and Fluid, while Uniswap and Camelot were major contributors to Arbitrum’s rise. Aerodrome, the largest decentralized exchange on the Base network, reported a 14% increase in trading volume.
Solana’s TVL decline reflects broader market challenges.
Because some applications, such as lending, staking, gaming, and synthetic assets, do not rely on continuous transactions, evaluating a DApp network based solely on on-chain activity is not ideal. Therefore, monitoring deposit trends measured by total value locked (TVL) for each network can provide more accurate insights. Ethereum is leading, while Solana remains firmly in second place.
It is the top blockchain with $1 billion in deposits (TVL). source: Dipilama
Despite a 5.9% monthly decline in TVL, Solana’s performance reflects the broader challenges facing the industry, with Ethereum leading the major platforms with an 18.1% decline in deposits. Solana’s TVL decline was primarily driven by Jito (down 14.1%) and Marinade (down 12%). On Ethereum, staking solutions from Lido and EigenLayer led the decline. Therefore, Solana’s TVL decline is not a big problem.
In addition to the on-chain indicators, Solana investors remain hopeful about the possibility of receiving approval for a cash exchange-traded fund (ETF) in the United States. The U.S. Securities and Exchange Commission (SEC), under outgoing Chairman Gary Gensler, has taken an anti-crypto stance, so investors should be cautious when President-elect Donald Trump takes office and Gensler resigns. We expect that the likelihood of Solana spot ETF approval will increase.
Solana’s lead over its rivals increases the odds of SOL above $230.
Trisigma, a self-described quant trader, said in represents . The same post noted that although cross-chain USDC transfers on Solana still face challenges, the overall network infrastructure is showing promising growth.
relevant: Even though ETH data looks bullish, it will take time for the Ethereum price to rebound.
Solana may not directly challenge Ethereum. This is because most DApp users on the network are not focused on the same level of decentralization and are less concerned about the influence of the Solana Foundation in maintaining and developing the ecosystem. The high-performance hardware required to run Solana validator nodes potentially concentrates control among wealthy entities.
As long as Solana maintains its lead over direct competitors such as BNB Chain and Tron, there is still a chance that SOL will surpass $230 in the near term. Regardless of the potential approval of the spot Solana ETF, the strong inflows resulting from the memecoin launch and trading demonstrate SOL’s ability to benefit from new market entrants.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.