The Solana (SOL) blockchain tech has recently witnessed a divergence in its on-chain activity and the number of new addresses joining its network. Regardless of an impressive surge in new addresses, SOL’s on-chain activity experienced a decline during May.
In the meantime, the asset’s price has likewise mirrored its on-chain activity as Solana (SOL) has been in a downtrend in the last week, down by nearly 10%.
On-Chain Activity Defies New Address Metrics
As of these 30 days (May), Solana (SOL) demonstrated growth in its user base, with 5.4 Million new addresses joining the blockchain tech. This surge represents the highest number of new addresses added since October 2022, hinting at a surge in interest in the Solana (SOL) blockchain.
Typically, a surge in new addresses suggests strong fundamentals for a blockchain tech, reflecting growing adoption and community engagement.
Nonetheless, while Solana (SOL) experienced a surge in new addresses, its on-chain activity declined during the same period. Data from The Block, a prominent blockchain tech analytics tool, outlines that the on-chain activity on the Solana (SOL) network dropped in May, contrasting the influx of new participants.
On-chain activity refers to the transactions, smart contract interactions, and other operations occurring on the blockchain tech. The decrease in on-chain activity raises questions about the factors influencing Solana’s blockchain’s overall engagement and usage and why growth in activity has failed to impact its value positively.
Unique Circumstances For SOL
Solana’s situation is unique owing to the divergence betwixt the increasing number of addresses and the decline in SOL’s price. Although while new addresses often correlate with positive growth indicators for digital currencies, SOL’s price experienced a greater than 10 percent fall since the beginning of May.
Initiate the 30 days at $21.71, SOL’s price as of now trades at $19.68. In the previous week, the investment has plummeted by 8.2%. Solana (SOL) has decreased from a high of $21.38 seen last Monday to trade below $20 at the time of writing.
Solana’s market cap has likewise plunged in the past 7 days. SOL’s market capitalization has dropped nearly 10 percent from a cap high of $217 Billion to a high of $8.4 Billion last Monday. In the meantime, its volume of daily trading has surged in the recent days.
From $100 Million and $150 Million several days ago to nearly $300 Million in the last 24 hours. The unique decoupling betwixt Solana’s new address growth and price performance caught the cryptocurrency community’s attention.
It’s worth noting that, Plenty of factors could contribute to Solana’s contrasting trends. Market dynamics, investor sentiment, and external market factors may have influenced SOL’s price decline.
In addition, while the surge in new addresses signifies growing interest, it is important to consider the nature of these addresses. Analyzing the activity associated with the new addresses, such as trading or longstanding holding, could provide further insights into the situation.
Featured image from Shutterstock, Chart from TradingView
