Solana Weakens as Capital Exits DeFi and Memecoin Activity Fades

Solana is under growing pressure after a sharp drawdown erased more than half of its value from recent highs.

Since peaking near $255 in mid-September, SOL has fallen roughly 52%, breaking multiple long-term support levels and raising the risk of a deeper correction if network activity fails to recover.

The price decline has been accompanied by a noticeable contraction in Solana’s onchain economy. Total value locked across the network has slipped back to levels last seen in early summer, hovering around $8.6 billion after peaking above $13 billion. Capital has steadily exited major protocols, with liquid staking and decentralized exchange platforms among the hardest hit.

This contraction is not limited to TVL. Key usage metrics are also trending lower. Network fees have declined over recent weeks, alongside drops in transaction counts and active addresses. Together, these indicators suggest that demand for block space and onchain activity is cooling rather than stabilizing, adding fundamental weight to the bearish price action.

One of the clearest signs of fading momentum comes from Solana’s memecoin sector. Earlier in the year, memecoin trading was a major driver of volume and fees on the network. That activity has now largely evaporated. Weekly decentralized exchange volume tied to memecoins has collapsed by more than 90% from its peak, reflecting both lower speculation and reduced retail engagement.

From a technical perspective, the chart structure reinforces these concerns. SOL has been trading within a bearish continuation pattern following its initial breakdown, and the loss of support in the mid-$130 range has opened the door to another leg lower. If the pattern plays out fully, downside targets cluster in the $90 area, with intermediate support near long-term moving averages around the low-$100s.

While short-term bounces remain possible, the broader setup suggests that SOL’s recovery will depend less on market sentiment and more on a tangible rebound in network usage. Until onchain metrics stabilize and capital begins flowing back into core applications, rallies may struggle to gain traction.

For now, Solana appears to be navigating a demand-driven correction rather than a purely technical pullback. Whether the $100 region holds could determine if this phase becomes a prolonged consolidation – or the start of a deeper retracement.