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Solana Token Decline Raises Concerns

The Native Token of Solana, SOL, Experienced a 25% Drop in Twelve Days, Raising Questions about the Bullish Momentum and Network Activity.

The native token of Solana, SOL, has seen a significant drop in just eleven days, going from $126 to less than $94. This rapid decline has raised concerns about the dynamics of the Solana network, particularly in terms of demand for its decentralized applications (DApps) and the negative performance of SPL tokens.

Impact of Airdrops and TVL Evolution

The initial rally of SOL was partly attributed to the excitement surrounding airdrops that occurred on the network, especially after the launch of the new JITO token and the explosion of the memecoin BONK. These events generated exceptional enthusiasm for Solana’s DApps, but after the initial hype, SPL tokens such as JTO, WIF, and BONK experienced significant losses, leading investors to question the $42 billion valuation of SOL.

An analysis of Solana network’s Total Value Locked (TVL) in terms of SOL shows a noticeable decrease, from 15.4 million to 12.8 million SOL, although there has been a 13% increase compared to the previous month. This decline could indicate decreasing demand for the network.

Declining DApp Activity on Solana

A closer look at the DApp activity on Solana reveals a widespread decline across all sectors, including decentralized finance (DeFi), liquid staking, gaming, social networks, and NFTs. The figures indicate a decrease in interest for the network, with a significant drop in volumes for decentralized exchanges and a decrease in the number of active addresses on NFT marketplaces.

Finally, interest in leverage on SOL seems to have diminished, as evidenced by the decreasing lower funding rate. Although the future of airdrops like Jupiter’s JUP could potentially reignite interest, the recent 25% correction may concern some investors as they approach a period of uncertainty related to Bitcoin ETFs.

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