Solana News Today: Solana Price Slides 10% as DeFi Activity Wanes and ETF Hopes Build

Solana’s price has retreated after a dramatic July rally, sparking debate among analysts about whether the decline signals a correction or a more prolonged pullback. The token, which surged over 40% in July, peaked near $200 before retreating to $160 in early August. The decline coincided with a notable drop in decentralized finance (DeFi) activity, with total value locked (TVL) metrics on the Solana network showing signs of waning interest [1].

The rapid rise of Solana in July was fueled by strong investor, developer, and institutional interest. The platform became a focal point of the “Solana Summer,” with volumes and on-chain activity hitting record highs. However, the momentum has since slowed, as daily active addresses on the network have started to decline, and users appear to be pausing their engagement with Solana-based protocols [1].

Experts have attributed the cooling off of the rally to several factors, including profit-taking following substantial gains, broader market caution, and occasional network congestion that has raised doubts among traders and developers. Despite these challenges, Solana’s technical infrastructure is still being upgraded, with planned improvements in August aimed at enhancing throughput and stability, potentially attracting users and developers back to the ecosystem [1].

Market data suggests that interest in Solana has not completely dissipated. Open interest for the token surged by over 370% in July, indicating renewed speculative and institutional buying activity [2]. On-chain metrics also point to continued optimism, with some analysts highlighting potential for a reversal if speculative trading picks up and if regulatory developments, such as exchange-traded fund (ETF) approvals, materialize [3].

Price behavior has become a central concern for traders. Solana briefly tested the $169 level, with analysts closely watching whether buyers can reclaim the $178 support level. A breakdown below this threshold could trigger further downward movement, potentially targeting the $140 level [4]. Despite the recent price drop, the network’s monthly revenue climbed to $87 million, underscoring continued demand for Solana’s infrastructure [5].

Market sentiment remains divided. The token has fallen 10% from its July peak of around $190, reaching $177, but some analysts remain cautiously optimistic. A technical analysis report notes a potential reversal near $220, supported by harmonic patterns and increased buying pressure, though this scenario hinges on maintaining strong on-chain activity and continued accumulation by large investors [6].

The possibility of an ETF approval has also generated speculation. Seven major firms—including Bitwise, Fidelity, and VanEck—have filed updated S-1 applications for spot Solana ETFs, aligning with U.S. Securities and Exchange Commission (SEC) feedback and incorporating liquid staking derivatives like JitoSOL [8]. If approved, these products could significantly boost demand for Solana, mirroring the bullish impact seen with Bitcoin and Ethereum ETFs. Market participants are closely watching the SEC’s timeline, with potential approvals expected as early as late August or September [8].

While short-term volatility persists, the underlying fundamentals of the Solana ecosystem remain strong. High open interest levels, whale accumulation, and structural developments like ETF filings suggest the market is preparing for a potential rebound. However, a failure to hold key support levels could extend the correction into lower psychological thresholds [4].

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Source:

[1] AInvest, https://www.ainvest.com/news/solana-news-today-solana-price-falls-160-cooling-defi-activity-market-shifts-2508/

[2] Coinpedia, https://coinpedia.org/price-analysis/solana-sees-370-jump-in-open-interest-can-sol-price-rebound/amp/

[3] BraveNewCoin, https://bravenewcoin.com/insights/solana-price-prediction-harmonic-pattern-and-buy-signal-hint-at-220-reversal

[4] Blockonomi, https://blockonomi.com/solana-slips-to-169-as-178-retest-turns-risky-for-august-whats-next-for-sol-price/

[5] Bitrue, https://www.bitrue.com/blog/solana-revenue-surges-despite-price-drop

[6] CFGI.io, https://cfgi.io/solana-fear-greed-index/

[7] BeInCrypto, https://beincrypto.com/crypto-whales-august-potential-gains/

[8] TheTradable, https://thetradable.com/crypto/solana-sol-price-set-for-potential-boost-as-seven-firms-file-updated-etf-applications-1--v