The Solana blockchain has recently faced a significant downturn, with its network revenue dropping to a six-month low as user activity declines. According to data from Artemis, Solana's daily revenue has decreased by 46% over the past 30 days, marking its lowest point since March 5, 2024.

The decline is largely attributed to a reduction in on-chain activity, particularly in the decentralized finance (DeFi) and non-fungible tokens (NFTs) sectors.

Here are some of the key points:

  • Solana's network revenue plummeted 46% in 30 days to a six-month low amid a 22% drop in daily transactions
  • Solana's DEX volume hit a six-month low of $7.7 billion as NFT sales declined 24% to $79 million in August
  • SOL/BTC has trended down since July, with SOL potentially revisiting an August low of $110, a 17% drop
  • Negative funding rates suggest traders bet on further SOL declines as meme coin hype fades
  • Solana faces critical support tests at $127 and $100 as it struggles to maintain user engagement

Over the last month, daily transactions on Solana fell to 29 million, a 22% decrease, which has resulted in a 45% drop in transaction fees, totaling approximately $523,000. This decline in user engagement is further reflected in the platform's decentralized exchange (DEX) volume, which hit a six-month low of $7.7 billion last week, according to Dune Analytics.

The situation has not gone unnoticed in the crypto community. A tweet from the account CoinNess Global on X (formerly Twitter) stated, "Solana revenue drops amid declining user activity. Daily transactions decreased by 22%, leading to a sharp reduction in transaction fees."

This sentiment resonates with many traders and investors who are closely monitoring the platform's performance.

The drop in Solana's user activity can be traced back to waning interest in meme coins, which had previously driven significant traffic to the network. As the hype around these assets has faded, so too has the engagement from users. This shift in interest has left Solana struggling to maintain its competitive edge against other blockchain platforms, particularly Ethereum.

Market analysts have also expressed concerns regarding Solana's future trajectory. The SOL/BTC trading pair has been on a downward trend since late July, indicating that SOL's value is decreasing relative to Bitcoin. The current exchange rate stands at 0.002, and if this trend continues, SOL could revisit its August 5 low of $110.

The bearish sentiment surrounding Solana is further heightened by the negative funding rate, which has persisted for over a week. This situation typically arises when short positions outweigh long positions, suggesting that traders are betting on further declines in SOL's price.

An independent trader, Bluntz_Capital, remarked on X, "SOL/BTC chart looks horrid," indicating a grim outlook for altcoin in the near term.

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Moreover, the decline in NFT sales on the Solana network has also been notable. Data from CryptoSlam shows that NFT sales volume in August reached only $79 million, a 24% decrease from the previous month. This decline in both DeFi and NFT activity underscores the broader challenges Solana faces in maintaining user engagement and revenue generation.

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