On Tuesday, the price of the native token Solana (SOL) rose above $200 again, recovering after a sharp drop on Friday, when the price fell to $167. Nevertheless, record liquidations of longs totaling $1.73 billion dealt a significant blow to the SOL derivatives market. This made traders wonder whether the bullish momentum had weakened and whether growth to $300 is possible at all in the current cycle.
Annualized funding rate for SOL perpetual futures. Source: Laevitas.ch
Demand for margin long positions remains weak. The funding rate for perpetual futures on SOL hovers around zero. In a normal market situation, it is usually in the range of 6% to 12%, reflecting buyers’ willingness to pay to hold their positions. Notably, even before Friday’s crash, the rate was around 4%, already below the standard neutral level.
When the funding rate goes negative, it usually indicates the dominance of shorts — sellers betting on a decline. However, such situations rarely last long due to the costs of holding the position. Nevertheless, tension in the SOL derivatives segment persists and most likely reflects the overall consequence of large-scale liquidations on Friday, which affected the entire crypto market.
Solana network activity declines amid rising competition
Solana network metrics indicate a persistent lack of bullish momentum, even though the token is trading 31% below its all-time high of $295, set in January. After the meme coin interest spike in early 2025, network activity has not returned to previous levels. In addition, the blockchain has lost ground in the decentralized exchange market — new competitors continue to take market share.
dApp project revenue and Solana network fees per week, USD. Source: DeFiLlama
Decentralized applications on Solana generated $35.9 million in revenue for the week, and total fees amounted to $6.5 million — this is 35% less than a month ago. The decline in activity weakens demand for SOL as a payment token for network operations. At the same time, the drop in network load also negatively affects staking yields, increasing pressure on the price.
Blockchains by seven-day fee volume, USD. Source: Nansen
While activity on the Solana network is slowing, competing blockchains such as BNB Chain, Ethereum and Hyperliquid are showing sharp growth in fees, largely due to Solana’s loss of market share. BNB Chain collected $59.1 million in fees for the week, mainly due to the success of the four.meme platform — a meme coin launchpad integrated with Binance Wallet and directly competing with the Pump.fun platform on Solana.
See also: BNB loses 12% from its all-time high, but bullish structure remains
Even assuming that the growth in BNB network activity is temporary, fees in the Ethereum ecosystem continue to grow steadily. Layer 2 networks such as Base, Arbitrum and Polygon showed fee growth of 40% or more for the week. Uniswap set a new record for fees, collecting $83.8 million — mainly due to activity on the Ethereum and Base networks. Hyperliquid also benefited from Friday’s market volatility, recording a sharp increase in trading fees.
To understand whether Solana traders are truly bearish, it is worth looking at the call-to-put options ratio — an indicator of demand for buys and sells.
Put-to-call options volume ratio for SOL on Deribit exchange. Source: Laevitas.ch
On the Deribit exchange, the put-to-call options volume ratio for SOL has remained below 90% for a week, indicating weak interest in neutral or bearish positions. Historically, when the market expects a correction, this figure exceeds 180%. The last time this happened was on September 20, after an 11-day price increase of SOL by 26.7%.
Although derivatives metrics may be distorted due to the spike in volatility following Friday’s crash, the persistent weakness of on-chain activity amid growing competitors raises questions. The strengthening positions of Aster, Hyperliquid and Uniswap directly reduce the growth potential of Solana.
See also: Solana teams up with Wavebridge to create stablecoins in South Korean won
Even if traders are not openly bearish, it is unlikely that a single factor, such as the possible approval of spot ETF for Solana in the US, will be able by itself to push the price to $300 in the near future.
