Solana has taken a significant hit in the market, dipping by 20% over the last four days and currently trading at $129. This decline comes amid a broader downturn affecting many cryptocurrencies,.
Amid all these, crypto analyst Jas from JasCrypto, with more than 120,000 followers on X, has outlined specific challenges Solana must overcome to return to previous heights.
Declining Onchain Activity
Solana ecosystem is showing clear signs of cooling off. Network fees have plummeted by 73%, while key decentralized applications within the ecosystem are experiencing concerning user exodus. Jito has seen a 56% drop in users, while Magic Eden has lost 38% of its user base.
According to Jas, a revival in decentralized finance (DeFi), non-fungible tokens (NFTs), and development of real utility applications could reignite demand for the blockchain platform.
Weak Leverage Demand
Despite Solana price having dropped by 52%, traders aren’t rushing in to take advantage. SOL perpetual funding rates remain in negative territory, which signals a concerning lack of bullish conviction in the market.
Jas suggests that a major catalyst, such as the introduction of a Solana spot ETF, could force short-sellers to cover their positions and potentially trigger a significant rally.
MEV & Market Maker Dependency
A particularly troubling statistic highlighted by Jas is that nearly 95% of Solana’s fees come from just 1.3% of users, predominantly MEV (Maximal Extractable Value) bots and market-making firms like Wintermute.
This concentration raises serious questions about Solana’s long-term sustainability if real organic activity doesn’t replace this highly concentrated usage pattern.
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The Trump Factor
The final challenge identified relates to the investment decisions of World Liberty Financial (WLF). The decentralized finance project is linked to former U.S. President Donald Trump. Recently, WLF made significant cryptocurrency purchases totaling $21.5 million.
The list includes $10 million in Ethereum (4,468 ETH at an average price of $2,238), $10 million in Wrapped Bitcoin (110.6 WBTC at approximately $90,420 per coin), and $1.5 million in Movement Network tokens (3.42 million MOVE tokens at $0.439 each).
These transactions, made before White House Crypto Summit focused on future cryptocurrency regulations and a potential U.S. strategic crypto reserve, did not include any investment in Solana. This omission from a high-profile institutional buyer might be contributing to market sentiment around SOL.
The path back to $180 for Solana isn’t impossible according to Jas, but addressing these four key challenges will be crucial for any sustained recovery in the near term.
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