SOL Price Plunge and Memecoin Washout: Solana Faces a 97% Activity Crisis

The fourth quarter of 2025 marked a turning point for Solana, with on-chain metrics revealing a dramatic contraction across its ecosystem. According to Coinotag’s analysis, network engagement collapsed by 97%, a staggering decline that reflects deeper structural challenges within the chain’s user base and transaction dynamics.

The Core Problem: Memecoin’s Grip and Subsequent Failure

The root cause of Solana’s network deterioration traces directly back to the memecoin phenomenon. Throughout 2024, speculative tokens drove extraordinary volumes—memecoins represented the lion’s share of trading activity on the blockchain. When the memecoin rally evaporated in Q4 2025, the damage was comprehensive: memecoin trading volumes nosedived 90%, essentially removing the primary engine that had sustained network congestion and fees.

Active participant counts tell an even bleaker story. The network contracted from over 30 million active traders at the end of 2024 to fewer than 1 million participants by Q4 2025—a devastating 97% reduction in engagement. This wasn’t merely a dip; it represented the departure of a constituency that had been disproportionately attracted to memecoin speculation rather than genuine protocol adoption.

SOL Token Performance in the Bear Context

The SOL token itself mirrored the ecosystem’s distress. Trading at approximately $120 during the Q4 downturn—a 58% collapse from its previous levels—the coin struggled to maintain investor confidence. More recently, SOL has recovered modestly to $134.28, reflecting a still-depressed annual performance of -37.79% over the year, underscoring the extended bear pressure on Solana relative to its competitors.

Why Ethereum Thrived While Solana Stumbled

The divergence between Solana and Ethereum during this period proved instructive. Ethereum outperformed in annual revenue generation by a factor of three, a testament to its more diversified user base and revenue streams that extended beyond speculative trading. While Solana’s fortunes became tethered to the memecoin cycle, Ethereum’s ecosystem maintained more resilient DeFi, NFT, and application-layer activity.

This comparative weakness raises a critical question: Can Solana rebuild network activity beyond the boom-bust dynamics of memecoin seasons, or will future cycles continue to be hostage to speculative excess followed by equally dramatic collapses?