Major digital currency network Solana is experiencing record-low transaction volumes amid a general slump in the broader crypto market. However, an analyst on X, Mezoteric, has raised concerns regarding the state of the 5th largest cryptocurrency by market capitalization.
According to the on-chain statistics, SOL’s transactions paint a bleak future picture. Some X users quickly pointed out that the cryptocurrency’s trading volume is still strong, which is not discussed in Mezoteric’s original post.
Other X commentators highlighted this major cause of concern for the Solana blockchain, including Gem Hunter and Gozde.
Solana Faces Correction After Galvanized 2023-2024 Run
Solana has had a generally positive last few quarters overall as it was among the first digital currencies to break free of the 2022-2023 bear market. SOL, the native digital asset, rose strongly and achieved a 10x growth during this period, fueled in particular by the rapid growth of the meme coin economy. The emerging joke-centric token economy found Solana a true answer for their short-term high-volume token launches. This, in turn, helped spur significant development on the native blockchain, making it the developers’ number one choice, overtaking even Ethereum, the largest programmable blockchain by valuation.
However, SOL has been under pressure from the market lately, and the bearish forces have forced a 10% price decrease from its highs above $200 set during the first quarter of 2024. Part of the reason the coin is facing downward price pressure is the meme coin market.
The Future
Solana’s future is looking increasingly gloomy amidst a major slowing down of the larger crypto market. However, the conditions are expected to improve in the last quarter of 2024 as the market mood will improve because of the widely predicted resumption of the 2024-2025 bull market. At one point, a potential SOL ETF approval was expected from the US Securities and Exchange Commission (SEC), but the regulator even halted that. If a spot ETF is approved, it could mean a major boost for the under-pressure decentralized network.
However, Solana needs to differentiate itself in the crowded crypto market to maintain its position as one of the top cryptocurrencies by market capitalization. Tron (TRX) continues to make inroads into the meme coin market as the latter seeks a pivot to keep things interesting. It can give SOL major competition heading into the incoming bull market.