Is Solana nearing collapse? Network activity shows drastic decline

Solana (SOL) price declined by more than 18% in the last 7 days as chaos in the memecoin category triggered a selloff. On-chain data suggests that SOL might be losing its shine and things could get worse. However, the cumulative crypto market is dealing with intense selling pressure as Bitcoin (BTC) and Ethereum (ETH) are continuously printed red indexes.

Solana took a big hit on Tuesday, dropping around 10% in the last 24 hours. The culprit behind the slide is the massive pump and dump on Solana-based memecoin, LIBRA. It has triggered panic across the memecoin sector.

The total crypto market cap is down by 5% over the last day to stand at $67.2 billion, with a trading volume of $7.35 billion.

Solana network activity crashes 55%

As per the data shared by Ali, the damage goes beyond price action as Solana’s network activity is crumbling. The number of active addresses on the SOL network collapsed from 18.5 million in November to just 8.4 million today. That’s a 55% drop and a sign of traders leaving the network.

This gets worse as the total volume transferred on the Solana network has plummeted from a massive $2 billion in November to just $26 million. That’s a 99% drop and a depiction of momentum stalling hard as analysts warn that this isn’t a bullish consolidation.

The total volume transferred on the #Solana $SOL network has dropped from $2 billion in November to just $26 million today! pic.twitter.com/qgCOmjd2It

— Ali Charts (@alicharts) February 17, 2025

Solana is facing major headwinds as 15 million SOL (worth $7 billion) is set to unlock over the next 3 months. With an inflation rate of 4.715%, the increased supply could keep SOL under serious selling pressure.

SOL price is down by 40% in the past 30 days. SOL is trading at an average price of $168.69 with a trading volume of $5.75 billion. It holds a market cap of $82.5 billion.

Now, all hopes for a bullish sentiment flip lie in the approval of spot Solana ETFs.

SOL memecoin fever is fading

The Solana hype train was fueled by memecoin frenzy, and now it has slowed down considerably. Degens are fleeing and insiders are dumping. The memecoin mania was Solana’s lifeblood when cheap fees and easy minting turned Pump.fun into a casino for degens. 

Santiment suggests that LIBRA, SOL, and MELANIA are the tokens registering the highest jump in discussion compared to their normal average rates. First up, Argentine President Milei retweeted a tutorial on how to buy LIBRA, sending its price to the moon and straight back down. Now, lawyers are coming for him with fraud charges.

Active Solana wallets are down 55% since November, and SOL’s price just dropped below $170. On the other hand, there is $MELANIA. This Trump-themed meme coin is now linked to LIBRA, with analysts saying the same team launched both. Allegations of insider trading and rug pulls are flying.