3 KEY SOLANA METRICS EXPLAIN EXACTLY WHY SOL PRICE IS DOWN

Last updated: June 19, 2025, 20:20 | Written by: Naval Ravikant

Solana (SOL), the blockchain once touted as a potential ""Ethereum killer,"" has faced significant headwinds in recent months. ⚡ Curated Crypto Currency News ⚡Crypto Speaks To Me does not claim that curated content will be read with 100% accuracy.You can find the original post at: htThe promise of low fees and blazing-fast transaction speeds initially drew a flood of developers and users, but the ecosystem has been grappling with challenges that have directly impacted the SOL price. Solana s primary decentralized application metric started to display weakness earlier in November. The network s total value locked (TVL), which measures the amount deposited in its smart contracts, broke to its lowest level since September 2025 at 30.4 million SOL. There are other factors that influence Solana s decrease in value and TVL.Since August, SOL has experienced a painful 29% correction, leaving investors wondering what went wrong. Solana s primary decentralized application metric started to display weakness earlier in November. The network s total value locked (TVL), which measures the amount deposited in its smart contracts, broke to its lowest level since September 2025 at 30.4 million SOL.The broader cryptocurrency market has also been bearish, with altcoin market capitalization declining by roughly 16% over the past eighty days.Factors such as the US Federal Reserve's quantitative tightening, rising interest rates, and the halting of asset purchases have contributed to this downturn. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the United States Federal Reserve s quantitative tightening, rising interest rates and the halting of asset purchasesHowever, Solana's specific struggles extend beyond these macro trends.This article will delve into three critical Solana metrics that shed light on the reasons behind the SOL price decline and provide insight into whether a rebound is likely.

Declining Total Value Locked (TVL) Signals Reduced Confidence

One of the most telling indicators of a blockchain's health is its Total Value Locked (TVL). 3 key Solana metrics explain exactly why SOL price is down 2025 0:04. 3 key Solana metrics explain exactly why SOL price is down. Crypto News. OctoberTVL represents the total amount of assets deposited within the network's decentralized applications (dApps). 3 key Solana metrics explain exactly why SOL price is downSource: CointelegraphPublished onA high TVL indicates strong user confidence and active participation in the ecosystem, while a declining TVL suggests the opposite.For Solana, the TVL metric paints a concerning picture. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the US Federal Reserve s quantitative tightening, rising interest rates and the holding of asset purchases. Although they are aimed at curbing inflationary pressure, theAs of November, Solana's TVL has plummeted to levels not seen since September 2025, hitting a low of 30.4 million SOL.This sharp decrease signifies a substantial exodus of funds from Solana-based dApps, reflecting a growing lack of trust in the network's stability and potential for future growth.

What factors contribute to this TVL decline?

Network Outages: Solana has been plagued by recurring network outages, disrupting dApp functionality and frustrating users.These outages erode confidence and lead users to seek more reliable alternatives.
Security Concerns: While Solana boasts impressive speed and low fees, some critics have raised concerns about its security architecture.Perceived vulnerabilities can deter users from locking their assets in Solana-based dApps.
Competition from Other Blockchains: The rise of other Layer-1 and Layer-2 solutions, such as Ethereum, Arbitrum, and Optimism, offers users alternative platforms with comparable or even superior performance.As users migrate to these competing ecosystems, Solana's TVL suffers. 3 key Solana metrics explain exactly why SOL price is down 3 key Solana metrics explain exactly why SOL price is down. OctoIt's been estimated that around $500 million has shifted to other blockchains.

The impact of this TVL decline on SOL's price is undeniable.As less value is locked within the Solana ecosystem, demand for SOL decreases, putting downward pressure on its price.It also suggests reduced utility for the SOL token itself, as it's needed less for interacting with dApps.

Decreasing Active Users and Transaction Volume Indicate Lower Adoption

Beyond TVL, another crucial metric is the number of active users and the transaction volume on the Solana network.These metrics provide a direct measure of user engagement and the overall health of the ecosystem.A thriving blockchain network should exhibit consistent growth in active users and transaction volume.However, Solana has experienced a worrying trend in the opposite direction.

Reduced user activity can be attributed to:

Negative Sentiment: The network outages and security concerns have fostered a negative sentiment surrounding Solana.Potential users may be hesitant to join the ecosystem, while existing users may choose to reduce their activity.
Limited dApp Variety: While Solana initially attracted a wave of dApp development, the pace of innovation has slowed down.A lack of diverse and compelling dApps can limit user engagement and prevent the network from reaching its full potential.
Higher Transaction Fees (relative to promises): Although one of Solana's selling points was low transaction fees, during periods of network congestion, fees can spike, deterring users from engaging in smaller transactions.While they're still typically low in comparison to Ethereum mainnet, the promise of incredibly low fees hasn't always held true.

The decrease in transaction volume directly affects the utility of SOL.With fewer transactions taking place, the demand for SOL to pay for transaction fees diminishes. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can beThis reduced demand, coupled with the declining number of active users, contributes to the downward pressure on SOL's price.A lack of activity also reduces the incentives for developers to build and maintain dApps on the network, creating a negative feedback loop.

Stagnant Developer Activity Raises Concerns About Future Innovation

A vibrant developer community is the lifeblood of any successful blockchain.Developers create the dApps, tools, and infrastructure that drive adoption and innovation.A decline in developer activity can signal a lack of confidence in the long-term viability of the platform.While directly measuring developer activity is challenging, several proxies can provide valuable insights.

These proxies include:

Number of New Projects Launched: A decrease in the number of new dApps and projects being launched on Solana indicates a waning interest from developers. 3 key Solana metrics explain exactly why SOL price is down dapps Futures jump mango Markets Solana TVL whatissolanaprice SOL price is down 29% sinceThis could be due to concerns about network stability, security vulnerabilities, or the overall market conditions.
Code Contributions: Monitoring code contributions to the Solana core protocol and related projects can provide insights into the level of active development. 3 key Solana metrics explain exactly why SOL price is down The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the United States Federal Reserve s quantitative tightening, rising interest rates and the halting of assetA decline in code commits and updates suggests that fewer developers are actively working on improving the platform.
Developer Community Engagement: Observing the engagement levels in developer forums, online communities, and hackathons can gauge the overall sentiment and enthusiasm among developers. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. Continue reading 3 key Solana metrics explain exactly why SOL price is down The post 3 key SolanaA decrease in participation and discussions indicates a potential decline in developer activity.

If developers lose faith in Solana's long-term prospects, they may choose to focus their efforts on other platforms with more promising growth potential.This exodus of developers can have severe consequences for the Solana ecosystem, hindering future innovation and limiting the network's ability to compete with other blockchains.The lack of innovation will continue the downtrend.

The Solana Network Outages: A Recurring Nightmare

One of the most persistent challenges facing Solana has been its susceptibility to network outages. Solana s primary decentralized application metric started to display weakness earlier in November. The network s total value locked (TVL), which measures the amount deposited in its smart contracts, broke to its lowest level since September 2025 at 30.4 million SOL. Solana network Total Value Locked, SOL. Source: Defi LlamaThese outages, often caused by transaction overload or technical glitches, disrupt the network's functionality and frustrate users.The frequency and duration of these outages have significantly eroded trust in Solana's reliability and scalability.These are one of the main things holding SOL back. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%.They are also the root cause of a lot of the previous metrics discussed, like low TVL and low activity.

The consequences of these outages are far-reaching:

Loss of User Trust: Frequent outages create a perception of instability and unreliability, leading users to lose faith in the network.This can result in users withdrawing their assets and migrating to other platforms.
Disruption of dApp Functionality: Outages prevent users from interacting with dApps, disrupting their operations and causing financial losses. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin marketThis can damage the reputation of dApps built on Solana and deter future adoption.
Negative Impact on SOL Price: Outages typically trigger a sell-off of SOL, as investors become concerned about the network's long-term viability.This can lead to significant price declines and further erode investor confidence.

While the Solana team has been working to address these issues, the recurring nature of the outages continues to be a major concern for the community.Until Solana can demonstrate a sustained period of stability, it will be difficult to regain the trust of users and attract new developers to the ecosystem.

Solana's Centralization Concerns: A Double-Edged Sword

While Solana is often lauded for its high throughput and low fees, some critics have raised concerns about its level of centralization.Unlike more decentralized blockchains like Ethereum, Solana relies on a smaller number of validators to process transactions.This centralized architecture enables faster transaction speeds but also makes the network more vulnerable to censorship and control by a single entity.This can impact Solana in the long term.

The potential risks associated with centralization include:

Censorship Resistance: A centralized network is more susceptible to censorship, as a single entity or a small group of entities can control which transactions are processed.This can undermine the core principles of decentralization and freedom of expression.
Single Point of Failure: A centralized network is more vulnerable to attacks and failures, as a single point of failure can bring the entire network down. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return.Continue reading 3 key Solana metrics explain exactly why SOL price is downThe post 3This can lead to data loss, financial losses, and reputational damage.
Lack of Transparency: Centralized networks often lack transparency, making it difficult to verify the integrity of the data and transactions.This can erode trust and create opportunities for corruption and manipulation.

The Solana team has acknowledged these concerns and is working to increase the decentralization of the network.However, progress has been slow, and the issue remains a point of contention within the community.Some steps the team has taken, is to increase the amount of validators.

Broader Economic Factors: The Impact of Quantitative Tightening

While Solana's internal challenges have undoubtedly contributed to its price decline, it's important to acknowledge the influence of broader economic factors.The cryptocurrency market as a whole has been under pressure due to macroeconomic headwinds, such as the US Federal Reserve's quantitative tightening policy, rising interest rates, and the halting of asset purchases. Solana (SOL) faced renewed downside pressure after multiple failed attempts to break above the $158 $159 resistance zone. Sellers took control during the hour, where volume surged past 1.1These measures, aimed at curbing inflationary pressures, have reduced liquidity in the market and increased risk aversion among investors.

The effects of quantitative tightening on the cryptocurrency market include:

Reduced Liquidity: Quantitative tightening reduces the amount of money in circulation, making it more difficult for investors to access capital and invest in risky assets like cryptocurrencies.
Increased Risk Aversion: Rising interest rates make traditional investments like bonds more attractive, leading investors to shift their capital away from riskier assets like cryptocurrencies.
Negative Impact on Altcoins: Altcoins, including Solana, are typically more sensitive to market fluctuations than Bitcoin. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. The past eighty days have been moderatelyWhen the market is under pressure, altcoins tend to experience larger price declines.

While Solana's internal challenges exacerbate the impact of these macroeconomic factors, it's important to recognize that the broader market conditions are also playing a significant role in its price decline.

Is a Solana Price Rebound Possible?Signs of Optimism

Despite the challenges facing Solana, there are some signs that suggest a price rebound may be possible. 3 key Solana metrics explain exactly why SOL price is down The last eighty days have seen a moderate bearish trend in cryptocurrency as altcoin market.While the digital currency has dropped, some indicators show optimism. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the United States Federal Reserve s quantitative tightening, rising interest rates and the halting of asset purchases.With increasing volatility, the volume boosts on Binance, liquidation figures and sustained open interest prove that SOL might have bottomed.

Factors that could contribute to a Solana price rebound:

Successful Network Upgrades: If the Solana team can successfully implement upgrades that address the network outage issues and improve scalability, it could restore trust and attract new users to the ecosystem.
Increased dApp Innovation: A resurgence in dApp development, with the launch of innovative and compelling applications, could drive user engagement and increase demand for SOL.
Positive Market Sentiment: An improvement in the overall cryptocurrency market sentiment, driven by factors such as regulatory clarity or increased institutional adoption, could provide a boost to SOL's price.
Increased Decentralization: Efforts to further decentralize the network could alleviate concerns about centralization and improve the overall security and resilience of the Solana blockchain.

It is crucial to recognize that a Solana price rebound is not guaranteed. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the U.S. Federal Reserve s quantitative tightening, rising interest rateThe network faces significant challenges, and its success will depend on its ability to address these issues effectively and adapt to the evolving landscape of the cryptocurrency market. Solana s primary decentralized application metric started to display weakness earlier in November. The network s total value locked (TVL), which measures the amount deposited in its smart contracts, broke to its lowest level since September 2025 at 30.4 million SOL. Solana network total value locked, SOL. Source: DefiLlamaThe team needs to prove they are able to address these issues and that they are not structural.

What Can Solana Do To Recover?

Solana has a lot to do to recover. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the United States Federal Reserve s quantitative tightening, rising interest ratesSome things they can do are:

Address Network Instability: The most crucial step is to resolve the recurring network outages.This requires a comprehensive approach, including identifying the root causes of the outages, implementing robust solutions, and rigorously testing the network's stability.
Enhance Security Measures: Strengthening the network's security architecture is essential to protect user assets and prevent future attacks. Solana is not out of the woods, but some signs show that the SOL price rebound might finally be here. While the digital currency hasdropped by 1.58% over the past 24 hours, its growth trend shows optimism. With increasing volatility, the volume boosts on Binance, liquidation figures and sustained open interest prove that SOL might have bottomedThis includes conducting thorough security audits, implementing advanced security protocols, and fostering a culture of security awareness within the developer community.
Promote Decentralization: Increasing the decentralization of the network is crucial to address concerns about censorship and control.This can be achieved by incentivizing more validators to participate in the network and reducing the reliance on a small number of entities.
Foster dApp Innovation: Creating a supportive environment for dApp developers is essential to drive innovation and attract new users to the ecosystem. Key price and network activity metrics for Solana continue to fall, and data suggests it's going to get worse. 3 key Solana metrics explain exactly why SOL price is down EcosystemThis includes providing developers with access to resources, tools, and funding, as well as fostering a collaborative and supportive community.
Improve Communication and Transparency: Maintaining open and transparent communication with the community is essential to build trust and address concerns.This includes providing regular updates on network performance, security incidents, and development progress, as well as actively engaging with the community on social media and other channels.

Frequently Asked Questions

Why is Solana's TVL so low compared to Ethereum?

Ethereum enjoys a first-mover advantage, a larger and more established ecosystem, and a more decentralized architecture.Solana's network outages and centralization concerns have also contributed to its lower TVL.

Is Solana a centralized blockchain?

Solana is less decentralized than some other blockchains like Ethereum, but the Solana team is working to increase decentralization. SOL price is down 29% since August, and three key metrics suggest bulls are in no rush to return. Continue reading 3 key SolanaIt's important to understand the trade-offs between speed, cost, and decentralization.

What is the long-term outlook for Solana?

The long-term outlook for Solana is uncertain.Its success will depend on its ability to address its challenges and adapt to the evolving landscape of the cryptocurrency market.If it can overcome its issues, Solana could still be a major player in the blockchain space.

Is Solana a good investment?

Investing in any cryptocurrency carries risk.Given the issues discussed, it is important to perform your own due diligence and consider your risk tolerance before investing in SOL. These metrics indicate a glaring shift in trust for Solana s ecosystem, leading to massive decline in activity over the past month. $500 million shifts to Ethereum, Arbitrum and other blockchains SOL price and the network s collapse in activity has caused a seismic shift in interest from traders, and most are moving their liquidity to otherUnderstand the risks associated with investing in Solana.Don't invest money you can't afford to lose.

Conclusion: Solana's Path Forward

The 29% price decline of SOL since August is a clear indication of the challenges facing the Solana ecosystem.Declining TVL, decreased active users and transaction volume, and stagnant developer activity all point to a loss of confidence in the network's stability and long-term potential. The downfall of Solana s SOL (SOL) token has been even more brutal, with the altcoin facing a 29% correction since August. The smart contract network focuses on low fees and speed, but the frequent outages highlight a centralization issue. Solana/USD price (blue) vs. altcoin capitalization (orange). Source: TradingViewRecurring network outages and concerns about centralization have further exacerbated these issues.While broader economic factors have also played a role, Solana's internal struggles are the primary drivers of its price decline.

However, a Solana price rebound is still possible.Successful network upgrades, increased dApp innovation, a positive shift in market sentiment, and increased decentralization could all contribute to a recovery.The Solana team needs to address its challenges effectively and regain the trust of users and developers to realize its full potential.

Key Takeaways:

Solana's price is down due to declining TVL, reduced activity, and network instability.
Network outages and centralization concerns are major obstacles.
A successful rebound depends on addressing these issues and fostering innovation.

The path forward for Solana is uncertain, but its future depends on the team's ability to overcome its challenges and deliver on its initial promise of a fast, scalable, and reliable blockchain platform. The downfall of Solana s SOL (SOL) token has been even more brutal, with the altcoin facing a 29% correction since August. The smart contract network focuses on low fees and speed, but theStay informed, do your research, and understand the risks before making any investment decisions.