Key insights:
SOL bounced back above $200, but low onchain activity and growing competition hinder the chances of a lasting rally.
Traders lack strong bearish sentiment, yet stagnant network growth and changing market dynamics limit SOL’s upside potential.
Solana’s native token SOL (SOL) surged back above $200 on Tuesday, recovering from the previous Friday’s flash crash that dropped prices to $167. However, the unprecedented $1.73 billion in long liquidations left a significant impact on SOL’s derivatives market, raising doubts among traders about the sustainability of bullish momentum and whether the token can reach $300 this cycle.
Interest in leveraged bullish positions remains low, as the perpetual futures funding rate hovers around 0%. Typically, this indicator fluctuates between 6% and 12% in stable markets, indicating that buyers are paying to maintain their exposure. Before the crash on Friday, SOL’s funding rate was around 4%, already below neutral levels.
A negative funding rate generally suggests a dominance of shorts (sellers), though such conditions are usually short-lived due to the costs associated. Nonetheless, the ongoing issues in SOL’s derivatives market likely reflect broader damage due to Friday’s liquidations across the cryptocurrency landscape.
Low Solana network activity in face of rising competition
Solana’s onchain metrics show a continual lack of bullish momentum, with SOL trading 31% below its $295 all-time high from January. Network activity has struggled to regain momentum since the memecoin boom earlier in 2025, and the blockchain has lost ground in the decentralized exchanges (DEXs) arena as new challengers capture market share.
Decentralized applications (DApps) on Solana generated $35.9 million in weekly revenue, while network fees reached $6.5 million, reflecting a 35% decline from the previous month. This downturn diminishes demand for SOL as the transaction token for blockchain operations. Lower activity also leads to reduced staking yields for SOL holders, contributing to further negative pressure.
In contrast, competing networks like BNB Chain, Ethereum, and Hyperliquid have seen their transaction fees significantly increase, mostly at the expense of Solana. BNB Chain’s impressive $59.1 million in weekly fees underscores the success of four.meme, a memecoin launchpad platform fully integrated with Binance Wallet, serving as a direct competitor to Solana’s Pump.fun.
Even if BNB Chain’s rapid growth is temporary, fees across the Ethereum ecosystem have soared. Layer-2 scaling networks such as Base, Arbitrum, and Polygon each witnessed weekly fees rise by 40% or more. Uniswap recorded its highest weekly fees ever at $83.8 million, largely fueled by activity on Ethereum and Base. Meanwhile, Hyperliquid also capitalized on Friday’s market volatility, posting a significant increase in trading fees.
To assess whether SOL traders have taken a bearish stance, it’s helpful to analyze the balance between call (buy) and put (sell) options.
The SOL put-to-call volume ratio on Deribit has remained below 90% over the past week, indicating limited demand for neutral or bearish positions. Historically, when traders anticipate a correction, this ratio exceeds 180%—a threshold last met on Sept. 20, following an 11-day, 26.7% rally in SOL’s price.
Related: BNB Chain experiences record user engagement, transactions surge 151% in 30 days
Although SOL’s derivatives indicators may have been skewed by the aftermath of Friday’s flash crash, the ongoing weakness in onchain activity amid advancing rival blockchains is concerning. The emergence of Aster, Hyperliquid, and Uniswap has directly impacted Solana’s potential for growth.
Even if traders are not overtly bearish on SOL, it seems unlikely that a single event, such as the impending approval of spot Solana exchange-traded funds in the United States, would suffice to propel its price to $300 in the short term.
This article is for general informational purposes and is not intended as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
