Solana News Today: Solana's SOL Dives 10% Weekly Amid Strong On-Chain Growth

Despite robust on-chain fundamentals, Solana’s native token SOL has experienced a nearly 10% weekly price drop, underperforming its Layer 1 (L1) peers and marking the largest weekly loss among the top five cryptocurrencies [1]. This divergence between strong network metrics and weak price performance has raised questions about the sustainability of Solana’s momentum.

On-chain data reveals that Solana’s Total Value Locked (TVL) has increased by 2.67% in the past 24 hours, user retention remains stable, and protocol-level throughput has scaled significantly, with a 500% month-over-month increase in stablecoin growth [1]. These metrics suggest continued adoption and usage within the ecosystem. However, the price action tells a different story.

The recent decline coincides with a broader deleveraging trend across the crypto market. Over $4 billion in Open Interest has been flushed in the past two weeks, while Ethereum has seen an even larger $10 billion in outflows, compounded by ETF outflows [1]. Despite this systemic risk-off environment, Ethereum has outperformed Solana in both absolute and relative terms, with SOL/ETH sliding by 25% in the past month—its worst monthly print since 2022 [1].

Institutional investors have also shifted their focus. DeFi Dev Corp. (NASDAQ: DFDV), for example, reported a 91% month-over-month increase in its SOL exposure, with its position now valued at $204 million [1]. Yet, despite this institutional backing, Solana’s performance lags behind Ethereum, which saw a 48.76% rally in the same period. This growing divergence is evident in the declining number of wallets holding over 10k SOL, weakening the token’s relative strength against ETH [1].

Long-term holders have shown resilience, with SOL positions held by these investors increasing by 102% between July 30 and August 4 [2]. However, the 14% weekly price decline has not been matched by significant buying pressure. The Realized Profit/Loss Ratio further supports this, showing a sustained decline in selling pressure, which could indicate the formation of a potential market bottom [3].

Meanwhile, broader macroeconomic factors have exacerbated the sell-off. Recent developments, including U.S. tariff plans and Federal Reserve signals, have led to a market-wide selloff, with Bitcoin and Ethereum both falling more than 10% in the same week [5]. These developments have impacted high-beta assets like SOL, as investors rotate into safer or more established alternatives.

Solana’s challenges are not limited to macroeconomic headwinds. The network has faced congestion and security issues in recent months, raising concerns about its reliability and long-term viability [7]. While these issues have not yet derailed the ecosystem’s growth, they have contributed to short-term volatility and a loss of market confidence.

Some analysts remain optimistic, predicting that SOL could reach $500 within three months based on current on-chain metrics [6]. However, these forecasts are speculative and do not align with the token’s immediate price performance. The market appears to be waiting for a clear risk-on trigger to push Solana beyond the $200 psychological level, but such a catalyst has yet to emerge [1].

As Solana navigates a challenging environment, the contrast between its technical strength and price action underscores the ongoing tug-of-war between fundamental growth and market sentiment. The coming weeks will be critical in determining whether the token can reestablish its position as a leader in the L1 space or risk further erosion of its standing relative to its peers.

Sources:

[1] AMBCrypto, https://ambcrypto.com/solana-heres-why-sol-faced-10-weekly-loss-despite-on-chain-growth/

[2] CoinCentral, https://coincentral.com/solana-sol-price-long-term-holders-accumulate-despite-14-weekly-drop/

[3] Mitrade, https://www.mitrade.com/au/insights/news/live-news/article-3-1007844-20250803

[5] 99Bitcoins, https://99bitcoins.com/news/altcoins/live-crypto-news-today-weekend-of-blood-with-btc-falling-to-112k-best-crypto-to-buy-now-as-the-market-bounces-back-up/

[6] Crypto, https://cryptoadventure.com/solana-price-prediction-for-2025-sol-to-hit-500-within-3-months-as-ripple-xrp-and-little-pepe-lilpepe-target-5x-gains/

[7] AOL.com, https://www.aol.com/could-investing-10-000-solana-103000983.html