The cryptocurrency market continued to fluctuate, and the price of Solana became the focus again today. As of March 17, the price of SOL fell 6.5% in the past 24 hours to around $127, hitting a new low in nearly a month. This decline is closely related to the recent weakness of the on-chain data of the Solana ecosystem. The market is worried that the loss of users in its DeFi field may trigger deeper selling pressure.
Behind the decline in Solana prices, the continued shrinkage of the total locked value (TVL) of the DeFi ecosystem is the primary cause. According to DefiLlama data, since reaching a peak of $12.1 billion on January 19, the TVL on the Solana chain has dropped sharply by 41%, leaving only $7 billion on March 17. Among them, the TVL of the head protocols Jito and Raydium have fallen by 30% and 32% respectively in the past 30 days, reflecting a significant cooling of investors’ interest in the Solana ecosystem. At the same time, Solana’s price has been cut by 56% since its January high of $294, and the simultaneous decline in TVL and coin price has further exacerbated the bearish sentiment in the market.
The shrinking on-chain activity has also cast a shadow on Solana’s price. Pump.fun data shows that Solana’s network daily transaction volume has dropped sharply from a peak of 71,738 on January 23 to 24,505 on March 17, a drop of more than 65%. The cliff-like decline in transaction volume not only leads to a decrease in on-chain fee income, but also highlights the loss of user participation. If this negative cycle of “ecological coldness-coin price decline” cannot be broken, Solana’s price may face a more severe test.
The signals in the derivatives market are also not optimistic. CoinGlass data shows that Solana futures open interest (OI) has dropped from a high of $8.57 billion on January 17 to $4.03 billion on March 17, a drop of 53%. At the same time, the funding rate of SOL perpetual contracts continued to be negative, reporting -0.10% on March 17, indicating that shorts dominate the market. The shrinking open interest combined with the long-term negative funding rate suggests that investors lack confidence in the short-term trend of Solana prices, and some funds may be withdrawing and waiting.
Technical analysis shows that Solana prices still have further downside risks. Currently, SOL/USDT is hovering around $120. If it falls below this support level, it may fall to the August 2025 low of $110, or even trigger a 35% deep correction to $80. Although the relative strength index (RSI) shows a bottom divergence signal, suggesting that some bulls are accumulating funds at low levels, Solana prices will still find it difficult to reverse the downward trend if they cannot break through the $140 resistance level. Market observers pointed out that the recovery of the DeFi ecosystem and the recovery of on-chain activity will be the key to Solana’s price rebound, otherwise the short-selling logic may continue to dominate the market trend in the short term.
