Solana (SOL) price. It is trading near $79.5 after failing to break out of the broad $76-$90 range that contained the price action for several months. The loss of momentum is occurring alongside signs of weak participation across the Solana ecosystem and derivatives market. At the same time, liquidation data creates a noticeable pocket of liquidity above current prices. This leaves SOL at a critical juncture: continued weakness could reinforce the ongoing range-bound structure and lead to a further decline.
Solana network activity continues to cool
The first warning sign comes from Solana’s on-chain activity. The number of active users has steadily declined from about 3 million earlier this year to less than 2 million in recent weeks, data shows. The latest reading of nearly 1.9 million users indicates that network engagement has continued to weaken despite multiple attempts by the price to recover.
A decrease in the number of active users often indicates a decrease in engagement across the ecosystem, which could ultimately impact demand for the network’s native token. Importantly, this trend has remained unchanged for several months, suggesting that the slowdown is not just short-term fluctuation. As user activity shrinks, Solana loses one of the key fundamental drivers that previously supported its strong market performance.
Live trading volume and open interest reflect diminishing participation
The vulnerability extends beyond user activity. According to DefiLlama data, Solana’s live trading volume has been on a sustained downward trend since peaking earlier this year, with daily trading activity declining significantly from multi-billion-dollar levels. The continued decline indicates continued fading liquidity and speculative demand across the ecosystem.
The derivatives market displays a similar pattern. Open interest has declined significantly from recent highs near $3 billion and is now hovering near $2.1 billion. A decline in open interest typically indicates traders are closing their positions and reducing their exposure to leverage, reflecting declining conviction in the asset’s near-term direction.
What makes the current situation unusual is that financing rates remain positive despite the decline in participation. This suggests that traders still maintain a bullish bias even as network activity, live trading volume, and exposure to derivatives remain weak.
Maybe the bears are setting their own trap
While the broader data points to weakness, the liquidation chart highlights potential risks for bearish traders. According to Coinglass data, the largest concentration of short liquidations is clustered between $83 and $87, creating a large liquidity pocket above the current price near $79.5.
This means that a relatively modest recovery could trigger a series of short liquidations, forcing bearish traders to buy back positions and accelerating the bullish momentum. Such events often lead to sharp rallies that appear disconnected from underlying fundamentals.
As a result, the market is entering a critical phase. On the one hand, a decline in active users, declining live trading volume, and shrinking open interest continue to support a bearish case. On the other hand, increased focus on short trades increases the possibility of a sudden rally if buyers reclaim nearby resistance levels.
Can SOL defend the $76 support area?
Solana’s declining user activity, declining DEX volume, and shrinking open interest suggest that engagement across the ecosystem continues to weaken, reinforcing the recent technical collapse. However, the large concentration of short liquidations above current prices presents the potential for a sharp rally if the bulls regain control. For now, the key levels remain $76 on the downside and the $83-87 liquidity zone on the upside, and the next breakout will likely determine whether SOL price will extend its correction or see an unexpected recovery.
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