In recent weeks, Solana (SOL) has shown strength in some of its on-chain metrics. However, major crypto holders are not just celebrating.
On one hand, Solana is experiencing record usage, while on the other, it is losing key stakeholders. Is this healthy turnover, or is smart money looking for a safe haven?
Solana is witnessing record on-chain activity, but whales are selling SOL tokens.
According to SolanaFloor, the network achieved its highest ever level of non-voting monthly transactions in July. The average actual transactions per second (TPS) was 1,318 transactions, the highest recorded.
At the same time, DeFiLlama data shows that the TVL (Total Value Locked) for Solana in terms of native SOL is now the highest it has been in over three years. This indicates increasing user interaction with DeFi protocols.
However, behind the scenes, large holders or whales are withdrawing millions of dollars in SOL and sending them to Binance.
Lookonchain noted that Galaxy Digital deposited 250,000 SOL, worth $40.7 million, and transferred it to Binance on Wednesday, August 6.
Another whale, tracked by Onchain Lens, makes $4.9 million from SOL after two months of inactivity.
After four years of storage, this same address quietly moved over $30 million of SOL to Binance in recent months. The whale still holds a massive $179 million of SOL, but selling pressures are increasing.
So what’s happening? Hyperliquid is stealing the spotlight from Solana.
Despite the notable on-chain activity, the price performance of SOL has been disappointing. Year-to-date, Solana's price has dropped nearly 30%, while BTC has risen by 26%, ETH by 15%, and XRP by 48%.
The biggest obstacle to Solana's success has been the decentralized Hyperliquid platform. After being the prominent hub for cross-chain trading for a long time, Solana has lost its position to the Hyperliquid perpetual product, especially among advanced users.
Matthew Sigel, head of digital asset research at VanEck, said: "Hyperliquid has managed to capture a significant amount of Solana’s momentum... because it offers a very simple and practical product."
In the meantime, Solana's technological plan has faced some difficulties. Fire Dancer, the high-performance client designed to enhance performance and reliability, did not meet deadlines.
Internal issues, developer departures, and public disputes have undermined confidence. According to Sigel, this uncertainty may be the reason for whale departures, even amid positive on-chain indicators.
However, not all major investors have exited. Analyst Ted highlighted a massive $12 million purchase of SOL on Binance, which was once again blocked on the Kamino Finance platform, indicating that some large investors are buying at price dips.
Meanwhile, Solana still enjoys unparalleled speed, and the ecosystem has matured beyond meme coins. However, institutions and serious capital need stability and trust, which are not fully guaranteed by Solana's engineering roadmap.
Sigel stated, "Solana must focus on communicating not only about its capabilities but also about its long-term stability."
Solana's stock price is trading at $164.31, down more than 2% in the last 24 hours.
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