Solana News Today: Solana's Valuation Crossroads: Institutional Bets vs. Fading On-Chain Confidence

Solana (SOL) has experienced significant price volatility and structural shifts in its market dynamics, raising questions about whether current price levels fully capture its underlying value. Historical data from CoinLore reveals that SOL reached a peak of $268.86 in January 2025, followed by a decline to $9.38 in December 2022, before rebounding to $214.14 as of September 8, 2025. Yearly returns show a 1,197% surge in 2021, contrasted with a -90.17% drop in 2023 and a -9.26% pullback in 2025. This volatility underscores the token's sensitivity to macroeconomic cycles and speculative trading.

Recent on-chain activity, however, suggests potential challenges for sustained price growth. According to DefiLlama, Solana's DeFi Total Value Locked (TVL) has declined by over 3% in the past 24 hours, averaging $12.48 million on September 7, 2025, down from $12.91 billion the prior day. A shrinking TVL indicates reduced user engagement in staking and lending protocols, which could signal waning confidence in the ecosystem. Additionally, active addresses on the Solana blockchain have plummeted to 6.2 million as of September 7, 2025, a stark drop from 33.33 million in late May 2025. This decline in transaction activity-173.72 million weekly transactions as of October 6, 2025, compared to 613.14 million in July-further highlights a bearish trend in demand.

Despite these on-chain headwinds, recent developments have injected optimism. Bitwise Asset Management's revised Solana ETF application, featuring a 0.20% annual fee and staking rewards, has intensified competition among ETF issuers. The fund, named "Bitwise Solana Staking ETF," aims to distribute network rewards to investors, potentially attracting both institutional and retail capital. Concurrently, Hong Kong-based Helius announced plans to acquire 5% of Solana's circulating supply-valued at $6 billion-further signaling institutional interest. These moves align with broader efforts to position Solana as a scalable, high-performance blockchain, contrasting with Binance Coin's (BNB) dominance in transaction volume and user growth.

Technical indicators also suggest a mixed outlook. As of September 8, 2025, SOL traded near $214.14, hovering above the 200-period EMA support at $218 but below the 100-period EMA resistance at $222. The Relative Strength Index (RSI) rebounded to 42, indicating moderate bullish momentum, though a break above the 50-level would be critical for a sustained rally toward $250. Meanwhile, the SEC's delayed decision on Solana ETFs-pushed to October 16, 2025-has introduced uncertainty, with SOL dropping to $190 after hotter-than-expected U.S. inflation data.

The interplay of these factors-declining on-chain activity, institutional bets, and regulatory developments-underscores Solana's complex valuation dynamics. While historical price trends and technical metrics suggest potential for a rebound, structural weaknesses in user engagement and market sentiment could limit upward momentum. Investors must weigh these factors against broader crypto market conditions, including the anticipated ETF approvals and macroeconomic trends.

Source: [1] Solana (SOL) Historical Prices | CoinLore (https://www.coinlore.com/coin/solana/historical-data)

[2] Why Solana's potential rally to $250 could be challenging (https://www.fxstreet.com/cryptocurrencies/news/solana-price-forecast-sol-bulls-eye-250-breakout-but-declining-on-chain-activity-could-delay-move-202510081245)

[6] Solana ETF fee cuts and $6B bet send SOL price into overdrive (https://invezz.com/news/2025/10/09/solana-etf-fee-cuts-and-6b-bet-send-sol-price-into-overdrive/)

[8] SEC delays decision on Solana ETFs (https://cryptobriefing.com/sec-delays-21shares-spot-solana-etf/)