Key Insights:
- Solana drops 3.87% to $138—Will $127 support hold the decline?
- SOL struggles below $140 as weak demand fuels bearish sentiment.
- Solana faces resistance at $155 while downside risk grows near $127.
Solana price has dropped 3.87% in the past 24 hours to $138, extending its struggles below key resistance levels. With weak on-chain activity and cautious traders, the token remains stuck between critical price levels.
Weak On-Chain Activity Signals Waning Interest
Solana’s price has been struggling since its drop from $180 in February, reflecting broader weakness in the crypto market. However, SOL’s decline appears more severe than that of other networks.
Data from DefiLlama shows that Solana’s network fees plunged 73% in four weeks, highlighting reduced demand. The decline coincides with falling activity on major Solana-based platforms. According to DappRadar, Jito’s active users dropped 56%, Magic Eden’s fell 38%, and lending platform Save (formerly Solend) lost 42% of its user base.
For comparison, Ethereum’s base layer saw a 17% drop in active addresses, while Base, the Ethereum layer-2 network, declined only 2% over the same period.
Derivatives Traders Remain Bearish on Solana Price
Futures market data signals a lack of confidence among traders. SOL perpetual futures funding rates have remained negative for three days, meaning short sellers are paying to hold their positions.
While the current -0.01% funding rate is relatively mild, it reflects weak demand for leveraged longs. Traders typically use leverage to bet on price increases, and the absence of this demand suggests hesitation about a potential recovery.
Some analysts believe a major catalyst, like a Solana spot ETF approval in the U.S., could spark a rally, but no such developments appear imminent. Without fresh bullish momentum, SOL could struggle to reclaim key resistance levels.
Critics Say Solana’s Growth Is a “House of Cards”
Blockchain researcher Arndxt points out that 95% of Solana’s network fees came from just 1.3% of users, mainly Wintermute, a market-making firm, and MEV (maximum extractable value) bots.
These bots exploit decentralized exchanges by manipulating transactions, and extracting profits from unsuspecting traders. If much of Solana’s activity is fueled by such trading behavior rather than real adoption, its long-term sustainability could be in doubt.
Michael Nadeau, founder of The DeFi Report, reinforced these concerns, saying
Trump’s Crypto Play Sidelines Solana
World Liberty Financial (WLFI), a decentralized finance project tied to U.S. President Donald Trump, recently tripled its Ether holdings while ignoring SOL entirely.
Despite the Trump (TRUMP) memecoin launch on Solana, WLFI has accumulated Ethereum, Wrapped Bitcoin, Tron, Chainlink, and Aave, but left SOL out of its portfolio.
At the same time, investors pulled $485 million from Solana in February, shifting funds to Ethereum, Arbitrum, and the BNB Chain, according to Binance Research.
Solana price could struggle to break out of its current range without fresh demand. A move above $155 might attract buyers, but further declines could follow if $127 fails as support.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
