SOL price action lags the wider altcoin market: Is Solana’s heyday over?

Solana's native token, SOL, has dropped 32% since November, significantly underperforming the broader altcoin market's 21% decline, raising concerns among bulls despite positive institutional interest, such as $636 million in US SOL ETFs and companies adding SOL to balance sheets. A high percentage of SOL (nearly 68%) is staked, limiting immediate sell pressure, but the price drop toward $120 is linked to weakening Solana network demand.

On-chain activity has been declining since August, with weekly network fees dropping from $7 million to $4.5 million, and DApp revenues falling 30% to $26 million. Concurrently, competing platforms like Base, Arbitrum, and Polygon have seen significant surges in transaction activity, with Base activity rising 34%. The Ethereum L2 ecosystem collectively surpasses Solana's Total Value Locked (TVL).

SOL is unlikely to close the performance gap unless on-chain activity reverses, as competition from other blockchains and traditional finance players limits the prospects for sustained bullish momentum.

(Source：Cointelegraph)