Key takeaways:
SOL is struggling to hold $80 as a 75% drop in futures’ open interest shows that traders are heading for the exits rather than opening new bets.
Solana remains heavily dependent on retail and memecoin activity, while Ethereum maintains its lead in high-value decentralized finance.
Solana’s native token, SOL (SOL), has hit a wall, repeatedly failing to break back above $89 over the last two weeks. This sluggish price action follows a rejection at $145 in mid-January and a sharp drop to $67.60 during the Feb. 6 crash. Demand for bullish leverage has essentially evaporated as traders brace for more pain.
Those betting against SOL are currently paying an annual rate of 20% just to keep their short positions open, a rare and aggressive move. When funding rates remain negative for over a week, it shows bears have strong conviction. In contrast, ETH’s annualized funding rate sat at 1% on Wednesday. While that’s below the usual 6% neutral mark, it’s nowhere near the lopsided levels seen in SOL.
Frustration is mounting as SOL underperformed the rest of the crypto market by 11% over the past 30 days.
Even though SOL remains among the top seven cryptocurrencies by market cap, the 67% slide from its $253 peak in September 2025 has left a mark on both onchain activity and derivatives. In fact, SOL futures open interest has dropped 75% from its $13.5 billion high seen only five months ago.
Solana “death spiral” feared
This price slump is also hurting the decentralized applications (dApps) built on Solana. Revenues are down across the board, from staking and decentralized exchanges to launchpads and lending platforms. Investors are starting to worry about a “death spiral,” in which falling prices reduce incentives, making it harder for people to justify holding SOL for the long haul.
Weekly dApps revenue on Solana dropped to $22.8 million, the lowest since October 2024. Curiously, the memecoin launchpad Pump generated $9.1 million in revenue over those seven days, accounting for 40% of the network’s total revenue. In comparison, weekly DApps revenue on Ethereum totaled $16 million, up 2% from the previous month.
Related: Pump.fun rolls out trader cashbacks in tweak to memecoin model
Unlike Solana, the top revenue-generating DApps on Ethereum are Sky, Flashbots, and Aave — key infrastructure players for decentralized finance. Essentially, Solana is heavily dependent on retail onboarding and the memecoin sector, while Ethereum has secured its lead in total value locked (TVL) and use cases that require higher decentralization.
This weak institutional demand is visible in SOL exchange-traded funds (ETFs). Solana’s high transaction volume and second-place TVL haven’t been enough to convince traditional investors to buy into SOL ETFs offered by Bitwise, Fidelity, Grayscale, 21Shares, CoinShares and REX-Osprey.
While relevant, Solana’s $2.1 billion in ETF assets under management is still 86% behind Ethereum’s $15.8 billion. Many investors have lost confidence that demand for Solana DApps will spike anytime soon, likely a side effect of the heavy hype around memecoins and launchpads.
For SOL to regain its bullish momentum, it will likely need a push from sectors like artificial intelligence infrastructure and prediction markets. These areas show promise, but the competition is fierce.
Presently, weak SOL derivatives and Solana onchain metrics are a warning sign. Any further disappointment may trigger another price drop, putting the already shaky $78 support level at serious risk.
