- Solana experienced a slowdown in network activity, which may affect demand for SOL.
- SOL struggles to stay above $160 after recent bullish rally.
Solana [SOL] has generally experienced a significant slowdown in network activity so far in August. A result that is particularly evident in the network’s on-chain revenue, which has dropped significantly in the last four weeks.
On-chain data from DeFiLlama revealed that daily turnover on the Solana network is down to a 5-month low. The last time its revenue numbers were this low was in March.
For context, the network generated $234,000 in on-chain revenue over the past 24 hours.
Source: DeFiLlama
Solana managed over $500,000 in daily revenue in the last 5 months. In most cases it even exceeded 1 million dollars. A testament to the robust demand of the network that we have observed since the beginning of the year.
Despite the revenue shortfall, Solana’s total value locked (TVL) continued to recover from the decline that occurred earlier this month. This may indicate a return of investor confidence.
However, the declining revenue reflects the state of the Solana network in terms of utility.
Transactions on the Solana network have cooled for the past 4 weeks. It averaged over 42 million transactions each day in the last week of July. However, the number of daily transactions fell below 40 million transactions in August.
Source: DeFiLlama
At the time of writing, the network recorded 32.8 million transactions within the last 24 hours. Daily transactions dropped below 35 million transactions in the last 2 days. Despite this, the network’s on-chain volumes have been flashing recovery signs.
Daily token volume climbed back over $ billion in the last two days. It previously slowed below this level last week as the market experienced a phase of uncertainty and low activity.
Source: DeFiLlama
But what does all this mean for solar demand? Technically, lower transactions and revenues confirm declining network activity. This should also be consistent with lower demand for SOL on the network.
However, demand for SOL in exchanges saw a small boost last week, driven mainly by a wave of positive sentiment triggered by expectations of interest rate cuts.
SOL managed to briefly push above the $160 price range over the weekend. It exchanged hands at $159.16 at press time after the bulls appeared to be taking a break within the current price level.
Source: TradingView
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SOL’s cash flow indicator confirmed that it has received positive cash flows in the past few days. One of the most notable potential effects of the waning activity in the Solana network is that SOL’s rebuttal may be limited.
Periods of heavy use showed sharp setbacks recently.