Key insights:
SOL has risen above $200, yet low onchain activity and increasing competition hinder prospects for a lasting rally.
While traders lack strong bearish sentiment, stagnant network growth and market share shifts keep SOL’s potential upside limited.
Solana’s native token SOL (SOL) rebounded to over $200 on Tuesday, recovering from Friday’s abrupt decline that saw prices drop to $167. However, the record $1.73 billion in long liquidations has impacted SOL’s derivatives market, leading traders to question if the bullish trend is waning and whether the token can realistically reach $300 in 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 normal market conditions, indicating that longs (buyers) are willing to pay to maintain their positions. Prior to Friday’s decline, SOL’s funding rate was around 4%, already below neutral.
A negative funding rate usually signifies seller dominance, but this situation seldom persists due to the costs associated with such bets. Nevertheless, the ongoing challenges in SOL’s derivatives market likely reflect the broader impact from the liquidations in the cryptocurrency sector on Friday.
Weak Solana network activity amid intensified competition
Solana’s onchain data indicates a continued absence of bullish momentum, with SOL trading 31% lower than its $295 all-time high from January. The network has struggled to regain momentum since the memecoin surge earlier in 2025, and it has also lost ground in decentralized exchanges (DEXs) as new competitors capture market share.
Decentralized applications (DApps) on Solana reported $35.9 million in weekly revenue, while network fees amounted to $6.5 million, representing a 35% decrease from the prior month. This decline diminishes demand for SOL as the payment token for blockchain operations. Decreased activity also leads to reduced staking yields for SOL holders, creating further downward pressure.
In contrast, competing networks like BNB Chain, Ethereum, and Hyperliquid have seen significant increases in fees, primarily at Solana’s expense. BNB Chain’s remarkable $59.1 million in weekly fees underscores the success of four.meme, a memecoin launchpad that is fully integrated with Binance Wallet and directly competes with Solana’s Pump.fun.
Even if one considers BNB Chain’s growth as temporary, fees across the Ethereum ecosystem have risen sharply. Layer-2 scaling networks such as Base, Arbitrum, and Polygon each experienced weekly fees increase by 40% or more. Uniswap recorded its highest weekly fees ever at $83.8 million, largely driven by activity on Ethereum and Base. Meanwhile, Hyperliquid also profited from Friday’s market volatility, showing a notable rise in trading fees.
To assess whether SOL traders are bearish, it’s useful to analyze the balance between call (buy) and put (sell) options.
The SOL put-to-call volume ratio on Deribit has stayed below 90% for the past week, indicating low interest in neutral or bearish positions. Historically, this metric rises above 180% when traders anticipate a correction—a level last seen on Sept. 20, following an 11-day, 26.7% rally in SOL’s pricing.
Related: BNB Chain witnesses record user engagement, transactions soar 151% in 30 days
Although SOL’s derivatives metrics may have been affected by the volatility from Friday’s sudden drop, the persistent weakness in onchain activity as rival blockchains gain traction is alarming. The emergence of Aster, Hyperliquid, and Uniswap has directly undermined Solana’s potential for growth.
Even if traders remain neutral on SOL, it’s improbable that a singular event, such as the potential approval of spot Solana exchange-traded funds in the United States, would be sufficient to propel its price to $300 in the near future.
This article is for informational purposes only and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
