Solana Under Pressure as Memecoin Frenzy Fades

Solana’s explosive rise in late 2024 and early 2025, which positioned it as one of crypto’s strongest performers, was largely fueled by rapid memecoin launches and hyperactive retail speculation. However, that speculative frenzy has sharply cooled, creating significant headwinds for the network. According to data from Glassnode and The Block, the number of daily active addresses on Solana has plummeted to 3.3 million, down dramatically from over 9 million at the start of the year, marking a concerning 12-month low for user engagement.

The decline primarily stems from the disappearance of bots and short-term users who flooded the chain during its speculative peak. This slowdown has immediate consequences for Solana’s ecosystem health, translating into softer fee revenue and thinner liquidity that makes SOL more vulnerable to market shocks. Analysts warn that until new high-utility use cases—such as payments, gaming, or real-world asset applications—attract more permanent, sticky users, Solana’s engagement metrics may continue oscillating with speculative cycles rather than demonstrating organic growth.

Despite these concerning engagement trends, Solana’s ecosystem maintains fundamental strength. Its DeFi total value locked (TVL) stands at nearly $10 billion, supported by major protocols including Jupiter, Jito, and Kamino. Meanwhile, developers continue building stablecoin primitives, high-throughput consumer applications, and institutional-grade infrastructure like Firedancer, suggesting the network’s long-term potential remains intact even as short-term speculative interest wanes.

Another major pressure point for Solana comes from the ongoing monthly SOL unlocks from the FTX/Alameda Research bankruptcy estate. On November 11 alone, Alameda unstaked 193,000 SOL worth approximately $30 million, part of a vesting schedule that extends through 2028. These tokens frequently find their way to exchanges, creating persistent short-term selling pressure that counteracts positive market momentum.

However, institutional demand is delivering the opposite effect through regulated channels. Solana has now recorded 10-11 consecutive days of ETF inflows, totaling $336 million for a single week. Bitwise and Grayscale Solana ETFs collectively hold $351 million in assets, demonstrating substantial institutional appetite. Even traditional financial institutions like Rothschild Investment and PNC Financial Services have disclosed new positions in Solana, while SoFi Bank’s move to enable direct SOL purchases from U.S. checking accounts has further legitimized the cryptocurrency within regulated finance.

This fundamental tug-of-war—systematic selling from bankruptcy estates versus accelerating institutional inflows—defines Solana’s current volatility and creates a battleground between short-term technical pressures and long-term fundamental adoption. The outcome of this conflict will likely determine whether Solana can transition from a speculative asset to a mainstream financial instrument.

From a technical perspective, SOL is trading in the $152-$156 range, having broken below key support at $156 amid rising volume. Market indicators remain bearish, with On-Balance Volume (OBV) continuing its downward trend, signaling persistent seller dominance in the current market structure. The pattern of lower highs and lower lows since early November suggests weakening momentum that requires a significant catalyst to reverse.

Liquidity heatmaps reveal strong magnetic zones at $144 and $140, making a retest of these levels highly probable in the near term. Analysts universally view $140 as the crucial support area that must hold to prevent deeper losses. If this level fails, liquidity extends toward $120, opening the door for a more substantial correction that could erase recent gains. However, a successful defense of the $140-$150 demand zone could trigger a sharp rebound toward $165-$180, particularly if ETF flows remain steady and Bitcoin maintains its position above the $98k-$100k range.

The current technical setup places Solana at a critical juncture where its ability to defend key levels will determine whether the asset stabilizes for another upward move or slides into a deeper correction. With institutional interest providing a fundamental floor but technical pressures mounting, Solana’s near-term trajectory hangs in the balance between these competing forces.