- Solana has underperformed compared to major cryptocurrencies, facing steep price declines, high liquidations, and reduced daily active addresses.
- Institutional adoption and pending US SEC ETF decisions offer potential catalysts for SOL’s recovery.
Solana (SOL) has recently faced sharper declines than many of its crypto peers, prompting questions about the underlying causes behind its underperformance. Over the past week, SOL has lost nearly 10% of its value, trailing behind major coins like Bitcoin, Ethereum, and XRP.
Market Liquidations Intensify Selling Pressure
Data from Coinglass reveals that market-wide liquidations surpassed $290 million in the past 24 hours, with Solana derivatives contracts accounting for $31.6 million of forced selling. Comparatively, Ethereum saw $68.5 million and Bitcoin $52.2 million in liquidations. SOL is now trading at $213.88, down 2.46% in the past day, marking the most significant drop among the top ten cryptocurrencies, where BNB saw the largest decline of nearly 1%.
Investor FUD and Technical Weakness
Solana’s recent price movements reflect a tug-of-war between profit-taking and new investments. Analysts note that SOL struggled to surpass the critical Fibonacci level of $217.84, and its MACD histogram reading of -0.077 indicates weakening strength. This technical pressure increases the likelihood of a drop toward the 20-day EMA at $206.51 or the 38.2% Fib level at $200.97.
Declining daily active addresses also point to reduced demand for Solana’s blockchain. Santiment data shows daily active addresses have fallen steadily since mid-June, currently standing at 2.43 million. Meanwhile, CryptoQuant highlights continued selling pressure, with the Futures Taker CVD turning negative since September 13. Large whale movements have compounded concerns, including $17.45 million moved to exchanges on September 8 and $836 million withdrawn from exchanges on September 21. Minor security exploits, like the $185K Solana wallet scam in early September, have added short-term worry among retail investors.
Bullish Catalysts Offer Hope
Despite the recent downturn, several developments could support SOL. Institutional adoption is growing, with Helius Medical Technologies acquiring over 760,190 SOL tokens, representing roughly $167 million. Kazakhstan’s central bank also launched a pilot stablecoin project in collaboration with Solana and Mastercard, demonstrating increasing corporate adoption.
The most notable near-term catalyst remains the pending US SEC decisions on Solana ETFs. Bitwise and 21Shares applications are due by October 16, 2025, while Franklin Templeton’s application has been delayed to November. Approval could replicate the inflows seen with Bitcoin and Ethereum ETFs, potentially injecting significant liquidity into SOL.
Solana’s recent drop reflects both market volatility and structural pressures, yet growing institutional adoption and ETF potential suggest opportunities for recovery in the near term.
ALSO READ:How to Stake Solana (SOL) in 2025 – Complete Beginner’s Guide
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