Solana Price Drops 3.5% Despite 35% Transaction Surge

Solana's price has experienced a decline, dropping 3.5% to $150.67 over the past 24 hours, reversing a 6.15% weekly rally. This price movement comes despite a surge in on-chain activity, with total transactions on the Solana blockchain increasing by 35% over the past 30 days, reaching approximately 2 billion transactions. The total volume traded hit $61.513 billion over the past month, with $2.078 billion traded in the last 24 hours alone. This activity places Solana second in trading volume, behind only Binance Smart Chain, surpassing Ethereum, Base, and Sui.

However, the increase in transaction volume and activity does not align with the typical market sentiment, as Solana's price continues to decline. This divergence suggests that while there is significant on-chain activity, there is also a portion of the market selling, leading to a price slump. The number of weekly active users on Solana has dropped to 22 million, matching a low last seen in early May. This user decline, occurring alongside falling prices and rising volume, indicates declining confidence in SOL’s potential for a rebound.

Despite the bearish on-chain sentiment, off-chain indicators in the spot and futures markets reflect a growing bullish sentiment. Investors are either buying SOL or taking long positions in anticipation of a rally. Over the past two days, buyers have re-entered the market after a period of selling, with $27.5 million worth of SOL moving from exchanges to private wallets in the last 24 hours alone. If this trend continues, it could reduce exchange reserves and increase demand, potentially pushing SOL’s price higher.

Derivative activity has also surged over the same period. The Open Interest Weighted Funding Rate, a metric that reflects a market bias in perpetual futures, signaled a buyer-dominated trend. The rate stood at a positive 0.0025%, indicating that long contracts outnumber shorts and suggesting the market could favor buyers. This off-chain bullish sentiment contrasts with the on-chain bearish sentiment, creating a complex market dynamic for Solana.