What to Expect From Solana (SOL) in August?
After a strong rally in July, Solana's momentum is waning as the price drops and network activity slows. August may bring further challenges unless sentiment improves.
Solana reasserted its dominance as one of the resilient large-cap altcoins, riding on the wave of July’s broader market rally. Closely tracking Bitcoin’s upward momentum, SOL surged past the $200 mark to hit a cycle high of $206.19 on July 22.
This price rally triggered a spike in on-chain activity across the Solana ecosystem, pushing up its DeFi total value locked (TVL), DEX trading volumes, and overall chain revenue. However, signs of exhaustion are starting to show. SOL has slipped back below the $190 threshold, facing selling pressure that suggests investors may be rotating out after locking in July’s gains.
SOL’s Rally Powers Network Surge—But Can the Momentum Hold in August?
Between July 1 and July 22, SOL maintained a steady rally, pushing its value up by 40%. As SOL’s price surged, the on-chain value of tokens locked in lending pools and vaults across the Solana network rose, boosting the network’s TVL.
At press time, Solana’s TVL sits at $9.85 billion, a 14% increase over the past month.
For token TA and market updates: Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter .
Solana TVL. Source:
As demand for SOL climbed during that period, trading activity across DEXes on the network also climbed. Over the last 30 days, DEX volume has jumped by 30%, with trade volumes worth more than $82 billion recorded so far this month alone.
Solana Monthly DEX Volume. Source:
This spike in activity translated into higher network revenue. According to DefiLlama, Solana has generated $4.3 million in revenue since the beginning of July, marking a 13% increase from the $3.81 million recorded in June.
Solana Monthly Revenue. Source:
Solana’s Ecosystem Cools as Price Dips and User Activity Shrinks
However, as we approach August, momentum is fading on the Solana network. At press time, SOL has dipped to around $180, and signs of weakening demand across the network are emerging.
Solana Daily Active Address. Source:
For example, the daily active address count on Solana has plummeted in the past seven days. According to Artemis, it has declined by 16% during that period.
A drop in a network’s daily active address count signals reduced user engagement and on-chain activity. Fewer active addresses reflect a slowdown in transactions, dApp usage, and overall demand for the network’s services.
In Solana’s case, the 16% decline suggests waning participation, which hints at a broader cooldown in network growth as the new trading month commences.
As activity across the network dips, Solana’s DeFi TVL has also begun to pull back. Over the past week, TVL has fallen by 8%.
Solana TVL. Source:
This signals that users are either withdrawing assets from the DeFi protocols on the network or the value of those assets is declining due to market movements.
Solana Bears Circle as Price Nears Breakdown Point
SOL’s decline over the past few days has pushed its price dangerously close to its 20-day exponential moving average (EMA), which forms a critical dynamic support line at $178.25. For context, SOL currently trades at $180.51.
The 20-day EMA measures an asset’s average trading price over the past 20 trading days, giving more weight to recent prices. A decisive break below this level could potentially open the door for further downside, especially if accompanied by falling volume and network activity.
In this case, SOL’s price could fall to $171.78.
SOL Price Analysis. Source:
On the other hand, if market sentiment improves, this bearish outlook will be invalidated. In that scenario, the coin’s price could rally to $186.40. A successful breach of this level could propel the coin toward $190.47.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
CoreWeave default probability exceeds 60%! Jensen Huang "puts out the fire": Financing costs are declining, no need for NVIDIA to backstop
After Jensen Huang's speech, CoreWeave's stock price, which had fallen by as much as 9.5% in early trading, turned positive. The company's five-year CDS rose above 1,190 basis points during Thursday’s session, a historical high reflecting the cost of debt default protection, while yields on some of its corporate bonds have climbed above 15% to 16%. The five-year CDS spreads for Oracle, Amazon, Google’s parent company, and Meta are all at historically high levels. Deutsche Bank analysts believe that as the AI capital expenditure cycle is increasingly supported by debt rather than free cash flow, investors must place greater emphasis on signals from the credit market. Overall, while AI-related financing costs are not yet excessively high, worrying signs have begun to emerge.
Bitcoin volatility trends show Bitcoin is less volatile than 57% of S&P 500 stocks
Wall Street is wary of Bessent making another move to suppress yields; key clues may emerge this Friday
This Friday, major primary dealers of government bonds will receive the U.S. Treasury's routine survey before the refinancing announcement is released. Citigroup expects the survey may hint at a reduction in long-term bond issuance, or even the cancellation of 20-year U.S. Treasury bonds. Morgan Stanley emphasizes: "The next two refinancing announcements will be crucial, especially the one in November, which comes right after the midterm elections."
Risk aversion outweighs inflation concerns, US and European government bonds rise across the board, US Treasury yields plunge more than 10 basis points intraday
Investors concerned about rising inflation are shifting their focus to the potential impact of high borrowing costs on economic growth. Some commentators have linked the recent decline in U.S. Treasury yields to surging financing costs for AI-related companies, suggesting that pressure in the technology stocks and AI infrastructure sectors is driving funds toward safe-haven assets such as government bonds.
Crypto prices
More
