Solana Price Drops 14% Amid Weak Bullish Sentiment

Solana's recent price trajectory has shown signs of stagnation, with the cryptocurrency failing to sustain gains above key resistance levels. The price of Solana (SOL) was rejected at $158, leading to a 14% loss over seven days, dropping to $143. This decline occurred despite an increase in open interest on SOL futures. The lack of follow-through in price action suggests weak confidence among bulls, with the token remaining below its 50-day moving average and momentum indicators favoring sellers.
The funding rate for Solana perpetual futures has also collapsed to 0%, indicating a spike in bearish positioning. This drop in funding rates reflects a lack of sustained bullish momentum, even during brief rallies. The mid-May jump to $185 failed to maintain any lasting bullish sentiment, underscoring broader market skepticism. Additionally, the recent drawdown in Solana's price coincided with waning excitement around memecoins, which initially boosted volumes but offered no lasting support. The Trump-themed TRUMP token launch on the Solana network briefly pushed SOL toward the $185 mark, but the absence of real adoption or follow-through from institutional players left the rally exposed.
Solana's network activity has also shown signs of stagnation. Data indicates that the Solana network’s total value locked (TVL) remains near $10 billion, but DApp revenue has dropped sharply. Weekly income from decentralized applications (DApps) has fallen below $40 million, down from over $100 million between November and February. This stagnation adds to the bearish outlook, as network fundamentals remain subdued despite heavy trading volumes and leveraged activity. Without a pickup in developer activity and user engagement, token price recovery may struggle to find support.
One of the most prominent bullish catalysts for SOL remains the potential approval of a spot exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission. Though speculative, some market watchers believe the odds are improving. A research report backed this view, stating that Solana is “meaningfully better than Ethereum across every metric.” The firm believes more companies may soon adopt SOL as a treasury asset, citing operational simplicity and stronger developer momentum compared to Ethereum’s fragmented layer-2 ecosystem. However, the ETF narrative has yet to materialize into price strength, and without confirmed regulatory progress, traders remain hesitant to front-run institutional inflows.
Technically, SOL continues to trade above ascending trendline support near $133. The $157–$158 zone remains a major resistance area, while $185 acts as a breakout confirmation level. A Fibonacci retracement drawn from the $94.94 low to the $157.01 swing high highlights key levels at $125.97 and $133.30. Failure to hold above these could see SOL revisit $120 or lower. The upside potential remains valid only if bulls reclaim $160 and push toward $185 with volume support. Still, the current setup shows neutral momentum with no decisive trend confirmation. Traders appear to be waiting for macro signals or ETF clarity before taking directional bets.
Meanwhile, Ethereum (ETH) has been gaining institutional favor, which could further stall Solana's price run. Ethereum's price has stalled near $2,530, but co-founder Joseph Lubin has laid out a thesis that could justify a jump to $50,000. This institutional favor for ETH could divert attention and investment away from Solana, potentially impacting its price trajectory. The report is bullish on SOL, offering a price target of $275 by year's end and a target of $500 by the end of 2029, but it predicts that ETH will outperform SOL. This shift in institutional favor towards ETH could further challenge Solana's price run, as investors may prefer the more established and widely adopted cryptocurrency.
Geoff Kendrick, the head of digital assets research at Standard Chartered, explained his Solana thesis. Standard Chartered is a relatively large global bank. This Solana report was the bank’s first, in what may be a show of Solana’s growing relevance to institutional investors. The report is bullish on SOL, offering a price target of $275 by year’s end and a target of $500 by the end of 2029, but it predicts that ETH will outperform SOL in the short to medium term. Kendrick believes the bad vibes surrounding ETH are already “priced in.”
“There was a lot of debate in 2024 about, ‘Do [L2s] add or subtract value?’” Kendrick said. “So, let’s say that a lot of that story has already played out in a relative sense.” He later added: “For Solana, you came off massive multi-year lows post-FTX, had a comeback in 2023 thanks to memecoin activity, but now that memecoin trading is post-peak, Solana may underperform Ethereum in the near term.” Kendrick argued that the market trades Solana at a discount relative to its economic activity from memecoins because it views memecoin trading as unsustainable. Kendrick’s thesis has been correct over the past month, at least. The ratio of SOL’s price to ETH’s price is down nearly 15%.

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