For Solana (SOL), the past two weeks have been turbulent: within just two days, the token lost around 12% of its value, falling back to $213, the lowest level in two weeks. More than $112 million in leveraged long positions were liquidated, a clear sign that traders suddenly took a step back. The question now is: is this merely a temporary correction or the start of a deeper decline?

Traders Hesitant on Solana

The futures market shows that the usual demand for long positions has cooled significantly. Normally, funding rates for perpetual contracts range between 6% and 12%, but this week they dropped close to zero. This does not indicate heavy bearish pressure, but it does signal a hesitant market. Less than a month ago, the opposite was true, with funding rates around 30%. The contrast could hardly be starker.

Historically, such periods of caution have sometimes presented new entry opportunities. In August, for instance, the price fell sharply but then rebounded just as strongly. Whether the same scenario will play out now remains to be seen in the coming weeks.

Solana Blockchain Network Activity Slows

On-chain data also reflects this slowdown. The number of active addresses on the Solana network dropped 28% last week, while network fees fell by 15%. In comparison, Ethereum saw a 28% increase over the same period, and Binance Chain jumped 74%. Meanwhile, newcomers such as Aster and Hyperliquid are gaining ground, putting additional pressure on Solana‘s position.

Still, there are positive signs. Corporate interest is gradually rising. An Australian company recently announced a $100 million strategy to manage part of its reserves via Solana. Moves like these suggest that SOL‘s long-term prospects are not necessarily bleak.

Multiple Markets Under Pressure

The volatility is not coming from crypto alone. Global markets are also under pressure due to concerns over inflation and a cooling US labour market. The Nasdaq dropped 1%, and the total cryptocurrency market lost nearly $180 billion in value since Sunday. This illustrates how sensitive digital assets remain to broader economic developments.

Yet Solana maintains strong fundamentals. The network still leads in transaction counts and holds a solid second place in total value locked (TVL). If the price remains above the $210–$213 range and market risk appetite returns, a recovery towards $230–$240 is certainly possible.

Disclaimer: This is not financial advice. Always conduct your own research and consult professional guidance.