Important points:
- A 75% drop in futures open interest indicates traders are heading for the exits rather than starting new bets, and SOL is struggling to sustain $80.
- Solana still relies heavily 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 and failed to rise above $89 repeatedly over the past two weeks. This lackluster price action follows a rejection at $145 in mid-January and a plunge to $67.60 during the February 6 crash. Demand for bullish leverage has essentially evaporated as traders brace for more pain.
Annualized funding rate for SOL futures. sauce: Lavitas.ch
Those betting on SOL are currently paying 20% per year just to keep their short position open, which is a rare and aggressive move. Funding rates remaining negative for over a week indicates strong conviction among the bears. In contrast, ETH’s annualized funding rate remained at 1% on Wednesday. This is below the usual neutral mark of 6%, but far from the lopsided levels seen in SOL.
Dissatisfaction is growing as SOL has underperformed other crypto markets by 11% over the past 30 days.
Comparison of SOL/USD and total crypto assets (USD). sauce: TradingView
Although SOL remains among the top seven cryptocurrencies by market capitalization, its 67% decline from its peak of $253 in September 2025 has left a mark on both on-chain activity and derivatives. In fact, open interest in SOL futures is down 75% from its high of $13.5 billion just five months ago.
Solana fears “death spiral”
This price slump is also hurting decentralized applications (DApps) built on top of Solana. From staking and decentralized exchanges to Launchpad and lending platforms, revenues are declining across the board. Investors are starting to worry about a “death spiral” where falling prices reduce incentives and make it harder for people to justify holding SOL for the long term.
Solana Network Weekly DApp Revenue (USD). Source: Defilama
DApp weekly revenue on Solana fell to $22.8 million, the lowest level since October 2024. Notably, Pump, the memecoin launchpad, generated $9.1 million in revenue in its seven-day period, accounting for 40% of the network’s total revenue. In comparison, weekly revenue for DApps on Ethereum totaled $16 million, an increase of 2% month-over-month.
Related: Pump.fun rolls out cashback for traders in line with memecoin model
Unlike Solana, the most profitable DApps on Ethereum are Sky, Flashbots, and Aave, which are major infrastructure players in decentralized finance. Fundamentally, Solana relies heavily on retail onboarding and the memecoin sector, while Ethereum has a lead in Total Value Lock (TVL) and use cases that require a high degree of decentralization.
This weak institutional demand is seen in the SOL Exchange Traded Fund (ETF). Solana’s high trading volume and second-place TVL were not enough to convince traditional investors to buy the SOL ETF offered by Bitwise, Fidelity, Grayscale, 21Shares, CoinShares, and REX-Osprey.
Flow of virtual currency exchange traded products, USD 1 million. Source: Coinshare
Although related, 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 skyrocket in the near future, which is likely a side effect of the massive hype surrounding Memecoin and Launchpad.
For SOL to regain bullish momentum, it will likely need a boost from sectors such as artificial intelligence infrastructure and prediction markets. These fields are promising, but competition is fierce.
For now, vulnerabilities in SOL derivatives and Solana on-chain metrics are warning signs. Any further disappointment could trigger further price declines and put the already volatile $78 support level at serious risk.
