Solana Faces Critical Test as User Activity Plummets

Solana CRYPTO000SOL

The Solana blockchain is confronting a severe stress test. Current network metrics paint a concerning picture: the count of active traders has collapsed by nearly 97% over the course of 2025. With SOL currently trading around $121, analysts warn of a potential slide toward the critical $95 support level, even as institutional investors maintain a longer-term bullish outlook.

Adding significant downward pressure on the price is a recent SEC filing by Upexi. As a major institutional holder of Solana, the company submitted a shelf registration for one billion dollars. While this move simply facilitates future capital raises, market participants are interpreting it as a potential signal for either a liquidation or a strategic repositioning of its SOL holdings. This uncertainty has contributed to the asset's decline; since its all-time high of $293 in January 2025, Solana has shed 57.5% of its value.

A Stark Divergence in Investor Sentiment

The ecosystem is witnessing a clear split between two groups. Retail traders have largely exited, yet institutional players remain engaged through ETF products. This divergence suggests that larger investors may be waiting for lower prices to establish positions in anticipation of a long-term recovery. The key technical level to watch is $120. A sustained break below this threshold before year-end could open the path for a move under the $100 mark.

Network Metrics Signal Deep Trouble

On-chain data reveals the scale of the challenge. Monthly active traders on Solana have plummeted from a peak of approximately 30 million to fewer than one million. In parallel, network revenue derived from transaction fees has crashed. This dramatic decline raises fundamental questions about the ecosystem's near-term valuation. Historically fueled by speculative interest, Solana is seeing that very foundation erode at an alarming rate.

DeFi Sector Braces for Liquidation Cascade

Further risk is concentrated within Solana's decentralized finance (DeFi) sector. Data from derivatives markets indicates that long positions worth roughly $90 million face liquidation if prices continue to fall. A decisive break below the $120 level would trigger forced selling, likely amplifying downward momentum. From a technical perspective, SOL is already trading below key moving averages, with the next significant support zone residing at $95—a level undoubtedly on the radar of institutional investors.