TL;DR
- Solana confidence weakens as price remains under pressure and short positioning intensifies across derivatives markets.
- On-chain data shows steady growth in new wallet addresses and sustained network usage despite the downturn.
- Funding rates turn deeply negative while social dominance declines, conditions that have historically preceded volatility spikes and potential short squeezes.
While SOL trades below prior highs reached in late 2025, network usage metrics point to continued participation. Data from analytics platforms such as Santiment and DeFiLlama show wallet creation and decentralized application activity holding steady even as speculative appetite declines.
The divergence between market sentiment and on-chain expansion has drawn attention from traders and analysts monitoring structural indicators beyond price charts.
Solana Network Growth Expands Despite Price Pressure
On-chain figures indicate that new wallet addresses on Solana have increased consistently over the past five months. This expansion occurs during a period when SOL struggles to reclaim key resistance levels, highlighting a disconnect between price performance and user adoption.
Daily active addresses remain elevated compared with early 2024 levels, and total value locked stays above $1.5 billion across Solana-based decentralized finance protocols. Stablecoin transfers on the network also continue at scale, reinforcing the view that transactional demand persists.
Historically, rising network growth during price pullbacks has signaled accumulation phases. New participants entering the ecosystem while valuations compress often suggest long-term positioning rather than speculative exit. Although price has yet to reflect that activity, the structural trend remains intact.
Short Positioning Intensifies As Social Attention Declines
Funding rate data shows that average perpetual futures funding has turned sharply negative during recent drawdowns. Deeply negative funding indicates traders are paying to hold short positions, reflecting a buildup of bearish exposure.
Previous episodes of extreme negative funding in October and early February preceded liquidation cascades that pushed SOL higher. While past performance does not guarantee repetition, crowded short trades increase the probability of sudden upside volatility if spot demand returns.
At the same time, social dominance metrics have fallen steadily since the September 2025 peak. Reduced online discussion and declining retail engagement often coincide with late-stage corrections, when speculative enthusiasm fades and stronger hands accumulate.
The combination of rising network participation, heavy short exposure, and muted social interest presents a complex picture. Price remains technically weak, but underlying activity suggests the Solana ecosystem continues to function and expand. If broader crypto market conditions stabilize, these structural signals could support renewed momentum in the months ahead.
