Activity on Solana is Fading. Will it Reach New ATH?

Solana held the lead as the main layer 1 chain of this cycle for months, driven largely by its dominance in memecoin trading. But recently, this activity has cooled off. According to CryptoRank, many mid-cap tokens are down over 50%.

This pullback has hit Solana hard. Most on-chain metrics have declined, which put a lot of pressure on SOL price. Since its local top in early 2025, the token has fallen nearly 50% and returned to levels last seen in fall 2024.

The primary catalyst behind this drawdown is a sharp drop in DEX volume. Trading activity has fallen to its lowest since October 2024. Pump.fun shows similar trend, where the number of daily token launches has more than halved since the January peak.

One of the clearest signs of slowing activity is the collapse in stablecoin transfer volume. Daily stablecoin transfers are now hovering around $5 billion—down from over $20 billion per day just a few months ago. This suggests that profit-taking has slowed sharply as trading opportunities dried up.

Another key metric under pressure is network fees. Transaction fees on Solana has dropped to a six-month low. This is the result of two factors: reduced network activity and a falling SOL price.

Persistently low fees create headwinds for SOL. Solana burns 50% of all transaction fees, which is a deflationary mechanism tied directly to the network usage. When fees are down, the rate of supply reduction slows as well. Amid continuous SOL vesting for FTX and Alameda, this may cause the price to slowly go down.

Given the negative momentum, the obvious question emerges—can SOL still break through $300? The answer depends on the market demand for token, which could come from several directions:

• On-chain activity. Increased usage leads to higher fee burn, supporting price through reduced supply.

• Solana ETF launch. The anticipated arrival of a Solana ETF could bring in new institutional capital.

• Institutional or government adoption. Just as Donald Trump ran his memecoin on Solana, other applications can be run on it as well. Solana is leading not only in memecoins, but also in DePIN and AI.

Among these, on-chain activity is the strongest and most price-relevant driver. But it’s also the least predictable. A similar dip to what is happening now occurred in August 2024, when memecoin trading slowed sharply. Many assumed the cycle had peaked. But by fall, a stronger wave arrived. That pattern could repeat if April or May delivers a catalyst.

The ETF narrative appears likely to play out this year. On Polymarket, odds of a Solana ETF launching in 2025 sit at 89%. But the price may have already priced in that expectation.

Institutional and government adoption is a powerful long-term catalyst, comparable to Bitcoin’s accumulation narrative. Still, there are no meaningful signs of growth on that front yet. It’s something to watch, but not a short-term driver.

Most major investors and funds remain bullish on Solana. But many of those calls were made at the market top, when Trump’s memecoin pulled massive volumes into the ecosystem and sent SOL surging.

However, the current situation looks different. A move to $300 remains possible, but it’s a long-term projection. At the moment, there are no strong signals of a memecoin trading revival, aside from the broader hope for a shift in US monetary policy.

Even so, the Solana ecosystem is positioned well for the next wave. Liquidity remains strong, with over $12 billion in stablecoins on-chain. And beyond memecoins, the network is evolving into a home for real-world applications. These fundamentals create a supportive environment for SOL in the long run.