Key Takeaways:
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SOL is struggling to carry $80 as a 75% drop in futures open interest suggests traders are heading for the exit somewhat than opening recent bets.
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Solana stays heavily depending on retail and memecoin activity, while Ethereum maintains its leadership position in high-value decentralized finance.
Solana's native token, SOL (SOL), has hit a wall and has repeatedly didn’t break $89 over the past two weeks. This sluggish price motion follows a rejection at $145 in mid-January and a pointy decline to $67.60 throughout the February 6 crash. The demand for bullish leverage has essentially evaporated as traders brace for more pain.
Annualized funding rate for SOL futures. Source: Laevitas.ch
Those betting against SOL currently pay a 20% annual rate just to maintain their short positions open, a rare and aggressive move. When funding rates stay this negative for over every week, it shows that the bears are very confident. In contrast, ETH’s annual funding rate was 1% on Wednesday. While that's below the standard neutral mark of 6%, it's nowhere near as one-sided as SOL.
Frustration is growing as SOL has underperformed the remainder of the crypto market by 11% within the last 30 days.
SOL/USD in comparison with total crypto capitalization, USD. Source: TradingView
While SOL still maintains its place among the many top seven cryptocurrencies by market capitalization, its 67% decline from its peak of $253 in September 2025 has left its mark on each on-chain activity and derivatives. In fact, open interest in SOL futures is down 75% from its peak of $13.5 billion just five months ago.
Lower SOL prices reduce incentives and discourage long-term holding
This price drop also affects Solana-based decentralized applications (dApps). Revenues have fallen across the board, from staking and decentralized exchanges to launchpads and lending platforms. Investors are beginning to worry a couple of “death spiral,” where falling prices result in less incentive, making it harder for people to justify holding SOL in the long run.
Solana Network Weekly dApps Revenue, USD. Source: DefiLlama
Weekly dApps revenue on Solana fell to $22.8 million, the bottom level since October 2024. Curiously, the memecoin launchpad Pump generated $9.1 million in revenue in these seven days, accounting for 40% of your entire network. In comparison, weekly DApps revenue on Ethereum totaled $16 million, up 2% month over month.
Unlike Solana, Sky, Flashbots and Aave are the top-performing DApps on Ethereum – key infrastructure players for decentralized finance. Essentially, Solana is heavily depending on retail onboarding and the memecoin sector, while Ethereum has secured its lead in Total Value Locked (TVL) and use cases that require greater decentralization.
This weak institutional demand is visible in SOL Exchange Traded Funds (ETFs). Solana's high transaction volume and second place in TVL weren’t enough to persuade traditional investors to purchase into SOL ETFs offered by Bitwise, Fidelity, Grayscale, 21Shares, Coinshares and REX-Osprey.
Flows of exchange-traded crypto products, USD million. Source: Coinshares
Solana's $2.1 billion in ETF assets under management, while relevant, remains to be 86% behind Ethereum's $15.8 billion. Many investors have lost confidence that demand for Solana DApps will surge within the foreseeable future, which is probably going a side effect of the strong hype surrounding memecoins and launchpads.
For SOL to regain its upward momentum, it can likely need a lift from sectors similar to artificial intelligence infrastructure and prediction markets. These areas are promising, but competition is fierce.
Currently, weak SOL derivatives and Solana onchain metrics are a warning sign. Any further disappointment could trigger an extra price decline and seriously threaten the already shaky support level of $78.
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