Solana (SOL) has been making waves in the cryptocurrency space, particularly with its thriving meme ecosystem. However, the blockchain’s recent achievement in decentralized exchange (DEX) transactions has caught the attention of many. According to Coin98 Analytics, Solana topped the list of blockchains in DEX transactions over the past 30 days, with a staggering 435 million transactions. This impressive feat has left many wondering if it will have a positive impact on SOL’s price.

Rising Network Activity

A closer look at Solana’s network activity reveals a significant surge in daily active addresses. According to Artemis’ data, SOL’s daily active addresses increased sharply over the past month, reaching 3.5 million on August 30th. This growth in network activity is a positive sign, indicating increased adoption and usage of the Solana blockchain.

However, despite this growth, the blockchain’s daily transactions dropped during the same period. Additionally, the captured value on the blockchain also didn’t fare well, with SOL’s fees dropping last month, resulting in decreased earnings.

SOL Remains Bearish

Despite the positive developments in Solana’s network activity, SOL’s price remains bearish. According to CoinMarketCap, SOL’s price dropped by nearly 20% in the last seven days, with a further 2% decline in the last 24 hours. At the time of writing, SOL is trading at $129.67 with a market capitalization of over $60.5 billion.

Increased Selling Pressure

A possible reason for this dip could be the increased selling pressure. According to DeFiLlama’s data, SOL’s inflows increased and touched $47 million on September 1st, reflecting a surge in selling pressure.

Bearish Sentiment Dominates

Further analysis of various metrics reveals that bearish sentiment dominates the market. Coinglass’ data shows that SOL’s Long/Short Ratio declined, indicating more short positions in the market. Additionally, Solana’s Weighted Sentiment dropped, suggesting that bearish sentiment is prevalent. However, the trading volume dipped, indicating possibilities of a trend reversal.

Critical Support Level

At the time of writing, SOL is testing a critical support level. If the bulls manage to hold this level, SOL could initiate its recovery journey towards $163. However, the token’s Chaikin Money Flow (CMF) registered a decline, hinting at possible price corrections.

Conclusion

While Solana’s achievement in DEX transactions is a positive development, its impact on SOL’s price remains uncertain. The current bearish sentiment and increased selling pressure may continue to weigh on the token’s price. However, if the bulls manage to hold the critical support level, SOL could potentially initiate a recovery. As always, investors should exercise caution and keep a close eye on market developments before making any investment decisions.