Solana Price Jumps, But Network Adoption Remains Weak

Overview

Recent on-chain data indicates that Solana’s Network Growth has been declining, even as the price of its token has recovered. This discrepancy raises concerns about the network’s adoption and its potential for sustained growth.

Solana’s Network Growth Decline

According to data from on-chain analytics firm Santiment, the Network Growth indicator for Solana has been on a downward trajectory. This metric tracks the total number of new addresses created on the blockchain each week, specifically those that are participating in transfer activities for the first time. A declining Network Growth suggests that fewer new users are engaging with the network, which may indicate a lack of fresh investment interest.

The recent price recovery of Solana, which saw its token regain some value, occurs in a context where the Network Growth has not followed suit. Historically, robust price rallies are often supported by an influx of new investors, which generates heightened trading activity. The lack of new address generation could imply that the current bullish price action is not attracting additional attention or investment in the cryptocurrency.

The data shared by Santiment reveals that while Solana’s price has shown signs of recovery since reaching lows in December, the Network Growth has not seen a corresponding increase. This raises questions about the sustainability of the price recovery. In the past, price surges without a concurrent increase in Network Growth have led to diminished momentum, as evidenced by previous market cycles.

In a notable case highlighted by Santiment, a price rally in 2025 was not supported by an increase in Network Growth, leading to a decline in momentum. Conversely, during a bull run in late 2024, an increase in Network Growth coincided with rising prices, suggesting that adoption played a crucial role in supporting the price appreciation.

The current state of Solana’s Network Growth is concerning, as it has been in a long-term downtrend since reaching a peak in November 2024. The metric’s value has significantly decreased from 30.2 million to 7.3 million, indicating a substantial decline in the adoption of the network. The future trajectory of this indicator will be crucial in determining whether Solana can sustain its price recovery or if it will continue to struggle with low adoption rates.

From author

The situation surrounding Solana highlights the complex dynamics between price movements and user adoption in the cryptocurrency market. While price recovery can generate optimism, it is essential to consider the underlying fundamentals, such as the growth of the user base. Without new users and increased activity on the network, any price gains may be short-lived.

Impact on the crypto market

• The decline in Solana’s Network Growth raises questions about the long-term viability of its recent price recovery.
• A lack of new user engagement could lead to diminished trading activity, potentially impacting market sentiment.
• Historical trends suggest that sustained price rallies often rely on increasing adoption, making Solana’s current situation a point of concern for investors.
• The disparity between price recovery and declining Network Growth may lead to increased scrutiny of Solana’s fundamentals in the broader crypto market.
• If Solana cannot reverse the downward trend in Network Growth, it may face challenges in maintaining investor interest and market momentum.