Active Solana addresses have fallen by 54%, and the volume has shrunk by 31%! After the SOL price broke through $300, can the Alpenglow upgrade save the day?

Solana (SOL) token has recorded a 5.5% rise in the past 30 days, successfully breaking through the psychological barrier of $200. However, compared to BNB's 87% year-to-date (YTD) return during the same period, Solana's performance appears lagging. More concerning is that on-chain metrics show a sharp decline in Solana network activity: since the beginning of the year, daily active addresses (DAAs) have plummeted by 54% to 2.7 million, and weekly volume has shrunk by 31% to 500 million. This reflects a weakening growth momentum in the ecosystem. Although Solana still holds the second position in total value locked (TVL) in DeFi (12.5 billion USD), long-term market concerns are accumulating. In the future, the Alpenglow upgrade planned for the first quarter of 2026 is expected to boost transaction processing speed to 150 milliseconds, which will be key to accelerating its institutional adoption and RWA tokenization.

On-chain Activity Indicator Warning: Trader Interest Has Significantly Diminished

Solana's positive performance in price has overshadowed the severe decline in its on-chain activity. This stands in stark contrast to the strong growth of its competitors.

· Active addresses plummet: According to Artemis and Glassnode, daily active addresses (DAAs), a measure of trader engagement, have plummeted to 2.7 million from 5.8 million at the start of the year, a whopping 54% decline.

· Volume shrinkage: Weekly volume also suffered a severe setback, dropping from 724 million transactions at the beginning of 2025 to 500 million transactions, a decrease of 31%.

· Periodic peaks: Although January saw a surge due to the launch of meme coins such as Official Trump (TRUMP) and Melania Meme Coin (MELANIA), the downward trend had already begun after the DAAs peaked at 7.4 million on November 18.

· Analysis Interpretation: These two core indicators point to one conclusion: Solana's network activity has reached a temporary peak and is returning to the normal level before the election, reflecting that traders' interest in the Solana ecosystem is waning.

The advantages of TVL coexist with institutional benefits, but the growth momentum is in doubt.

Despite the concerning on-chain data, Solana's core position in the DeFi space and institutional benefits are still providing some support.

· The position of DeFi is solid: Solana remains in second place with a total lock-up position (TVL) of 12.5 billion USD, far surpassing BNB Chain's 9.2 billion USD.

· Positives: The market is currently in a bull market and institutional adoption is accelerating. Coupled with positives such as the launch of the multi-billion dollar Solana vault and the successful launch of the first spot-plus-stake ETF in the U.S., the downward trend in on-chain activity is particularly worrying.

· The hope of the Alpenglow upgrade: In response to current challenges, Solana is pinning its hopes on the Alpenglow upgrade. This upgrade is scheduled to be implemented in the first quarter of 2026, aiming to significantly increase the blockchain's transaction processing speed from 12 seconds to 150 milliseconds, bringing it closer to internet speeds. This improvement is expected to accelerate institutional adoption of RWA (Real World Assets) tokenization.

SOL Technical Structure Bullish, but Fundamentals Weigh on Long-Term Outlook

Despite the bearish fundamentals, SOL still maintains a bullish structure on the daily chart, with the potential to break higher prices.

· Support remains intact: In the recent pullback, the SOL price held well above its trendline support.

· Buy Signal: The Relative Strength Index (RSI) has just issued a buy signal after rising above the 14-day moving average.

· Key Support: The $205 to $200 area is a key support zone, as it aligns with both the trendline support of the Token and the 200-day Exponential Moving Average (EMA). If the price breaks below this level, it could signal the beginning of a deeper correction.

· Bull market target: If bullish momentum accelerates and successfully breaks through 300 USD, SOL is expected to rise to 500 USD in this cycle. If the breakout is accompanied by above-average volume, it will further support the bullish outlook.

· Long-term Risk: However, if the downward trend in volume and trader interest continues, other altcoins with better prospects may outperform SOL in the long run.

Conclusion

Solana is at a critical crossroads: despite its price and DeFi TVL remaining strong, the sharp decline in on-chain activity is an alarming warning signal, indicating that the bottleneck of its ecological growth is becoming apparent. The promise of the Alpenglow upgrade (which will boost Solana's speed to near-internet levels) is key to achieving institutional mass adoption and RWA tokenization in its next phase. In the short term, investors should view $200 to $205 as the lifeline of technical support. In the long term, Solana must successfully reverse the declining trend of DAA and volume while implementing technical improvements to ensure its long-term competitiveness as a top Layer-1 blockchain.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.