Solana’s Contradiction: Staking Hits Record High Amid Price Struggles

Solana CRYPTO000SOL

The Solana blockchain presents a market puzzle. On-chain activity and adoption are surging to unprecedented levels, yet the price of its SOL token remains under significant selling pressure, stuck in a narrow trading range. While the network attracts major projects from competitors like Ethereum, SOL's value lingers around $120, a figure roughly 58% below its all-time peak.

The current price movement is heavily influenced by a high-stakes duel between two major investors employing extreme leverage. One large holder maintains a long position with 20x leverage, currently sitting on unrealized losses exceeding $5.78 million. The opposing whale is equally leveraged but betting on a price decline—a short position valued at approximately $11 million that is currently profitable.

Liquidity data reveals the precarious technical landscape. A fragile support zone, vulnerable to long liquidations, exists between $121 and $122. Above that, a substantial resistance wall formed by short positions looms between $128.50 and $133. SOL has been oscillating within this tight corridor for weeks.

Fundamental Strength Contrasts with Token Performance

Defying the bearish price action, a key network metric signals strong holder conviction. The amount of SOL committed to staking reached a historic peak today, hitting 409 million tokens. This suggests long-term holders are prioritizing network security over selling, indicating sustained faith in Solana's underlying infrastructure.

This bullish signal comes with a caveat, however. The count of active validators has plummeted by 68%, falling from 2,500 to just 800. This shift stems from a strategic move by the Solana Foundation to reduce its delegations to smaller validators from 85 million SOL to 23 million SOL. While this action lowers inflationary pressure, it raises immediate questions about the network's decentralization.

DEX Landscape Shows Concentration Trends

The decentralized exchange (DEX) ecosystem on Solana has undergone notable consolidation. The aggregator Jupiter now commands 93.6% of Solana's aggregation market—its highest share in six months. Overall, aggregators are responsible for routing 74% of all DEX volume on the network, a substantial increase from 40% half a year ago.

Within Jupiter's operations, over 81% of volume flows through its native market maker, HumidiFi. This points to highly efficient liquidity management but also highlights increasing centralization within a segment built on decentralized ideals.

Ecosystem Gains and Competitive Realities

Solana continues to score strategic wins. Sorare, a major fantasy sports platform, announced its migration from Ethereum to Solana after six years, citing higher throughput and lower costs as key reasons—a symbolic victory for the network. Furthermore, Coinbase revealed plans to support SOL transfers via its Layer-2 network, Base, a development expected to enhance liquidity between the two ecosystems.

In the tokenized real-world assets (RWA) sector, the number of holders on Solana grew by 11% to 115,000. Despite this user growth, capital inflows told a different story in Q4. Solana attracted $216 million, lagging significantly behind both BNB Chain and Ethereum, which each drew over $1 billion.

The $121 Level Holds the Key

The immediate technical outlook remains tense. A failure to hold the $121 support level risks triggering a cascade of long liquidations. Conversely, if this level holds against the prevailing selling pressure, it could—combined with the record staking activity—signal the formation of a price bottom. While fundamental data points to long-term resilience, bears maintain control in the short term.