SOL drops below $127, but ecosystem staking rate hits a new all-time high—A battle between short-term pressure and long-term support

SOL has fallen 4.65% in the past 24 hours, dropping from a high of $148.22 to $127.44, with a corresponding market cap decline of $3.513 billion. This decline is not isolated in the context of the overall crypto market, but interestingly, while prices are under pressure, several fundamental indicators within the Solana ecosystem are actually strengthening. This disconnect between price and fundamentals is becoming a key factor in assessing SOL’s medium-term trend.

Short-term Downward Macro Environment

Chain Reaction of Risk Appetite Contraction

According to the latest news, SOL’s recent decline is primarily driven by macro factors. Geopolitical uncertainties and tariff concerns have led to a contraction in overall risk appetite in the crypto market. Funding rate data shows that while bearish sentiment towards BTC, ETH, and SOL has eased somewhat, there remains a large-scale bearish outlook on altcoins.

A key comparison is that, as the second-largest public chain by market cap, Solana has experienced a significantly larger pressure during the decline period than Bitcoin. This reflects that, in times of risk aversion, investors tend to flock back to the largest assets. From this perspective, SOL’s decline is not an ecosystem issue but a natural reaction to market risk sentiment.

Key Support for Short-term Trends

According to the latest information, in the short term, holding above the $91,500 level for Bitcoin is a prerequisite. Only when macro risks subside or institutional funds re-enter can high-risk assets like SOL expect a genuine rebound. Currently, the market is waiting for such catalysts.

Robust Ecosystem Fundamentals

Staking Rate Hits Record High, Long-term Consensus Forms

More notably, Solana’s staking rate hit a record high of 68.8% on January 20. What does this indicate? It reflects increasing recognition among ecosystem participants of the network’s security and long-term value.

Toly, co-founder of Solana Labs, further reinforced this signal with his latest view. He emphasized that low prices are conducive to early builders’ participation and pointed out that a truly thriving ecosystem requires a construction cycle of up to 10 years. Behind this statement is a clear message: the current price decline is actually an opportunity for ecosystem builders to participate.

Expanding Liquidity Infrastructure

The STKESOL liquid staking token launched by SOL Strategies initially staked 500,000 SOL and collaborated with major DeFi platforms such as Orca, Squads, Kamino, and Loopscale. Meanwhile, Circle minted 4.25 billion USDC on the Solana chain over the past 7 days, with the USDC Treasury adding a single issuance of 500 million USDC. What do these data suggest? The liquidity foundation of the ecosystem is strengthening, and stablecoin infrastructure is expanding.

While this growth in stablecoins also reflects cautious market sentiment towards risk assets, from an ecosystem development perspective, a deeper liquidity base is a necessary condition for long-term prosperity.

Continued Network Activity Leadership

According to Nansen data, the number of active addresses on the Solana network reached 27.1 million last week, a 56% week-over-week increase, with transaction volume hitting 515 million transactions, both ranking first. What does this imply? Despite the price decline, actual network usage is growing. This is an important divergence signal.

ETF Inflows Continue but Show Volatility

SOL spot ETFs saw a net inflow of $46.88 million last week, with the Bitwise Solana Spot ETF (BSOL) recording a weekly net inflow of $32.23 million. However, it’s noteworthy that on January 16, there was a single-day net outflow of $2.22 million, marking the fourth day of net outflows since listing. This indicates that institutional investors are also cautious at current price levels, waiting for clearer macro signals.

Data Comparison: Price vs Fundamentals

Personal Observations

From these data, SOL is currently in a typical “price-fundamentals disconnect” phase. Short-term macro pressures are pushing prices down, but actual operational indicators within the ecosystem are strengthening. This disconnect usually does not last long; either macro risks recede and prices rebound to compensate, or the strong fundamentals will eventually be re-rated by the market.

A key point to watch is whether the current decline will attract long-term builders and whether institutional funds will reassess SOL’s value at this price point. Based on the record high staking rate, the answer to the former seems to be yes.

Future Focus

• Macro Factors: Can BTC hold above $91,500? Will geopolitical tensions ease?
• Institutional Movements: Are ETF inflows stable? Are large funds starting to build positions?
• Ecosystem Progress: Progress of new projects like SKR launch, tokenized assets, etc.
• Competitive Landscape: Will BNB Chain’s surpassing in tokenized assets impact SOL’s narrative?

Summary

SOL’s 4.65% drop in 24 hours may seem fierce, but from an ecosystem perspective, it’s more like a short-term fluctuation amplified by macro risks. Staking rate hitting a new high, significant growth in network activity, and expanding liquidity infrastructure all indicate that Solana’s ecosystem development is accelerating. The short-term price pressure could be an opportunity for long-term participants. The key is to wait for macro risks to subside and for signals of institutional re-entry.