Futures market signals SOL bulls in retreat: Can $80 support level survive?
Declining dApp revenue on Solana combined with weak demand from institutional and retail participants threatens the critical $78 price support for SOL.
Key takeaways:
- SOL faces challenges maintaining the $80 threshold as futures open interest plummets 75%, indicating traders are exiting positions instead of establishing new leveraged bets.
- The network continues to rely predominantly on retail participants and memecoin trading, whereas Ethereum dominates in high-value decentralized finance applications.
The native cryptocurrency of Solana, SOL, appears to have encountered significant resistance, consistently unable to reclaim the $89 price point throughout the past fourteen days. The stagnant price movement follows a pullback from $145 in mid-January and a precipitous decline to $67.60 during the market crash on Feb. 6. The appetite for bullish leverage positions has virtually disappeared as market participants prepare for additional downside.
Market participants holding short positions on SOL are presently paying approximately 20% annually to maintain these bearish bets, representing an unusually aggressive stance. This persistent negative funding rate extending beyond a week demonstrates strong conviction among those betting on price declines. By comparison, ETH's annualized funding rate registered at 1% on Wednesday. Although this figure sits below the typical 6% neutral benchmark, it remains far from the extreme imbalance observed in SOL markets.
Trader frustration continues to build as SOL lagged behind the broader cryptocurrency market by 11% during the previous 30 days.
Despite SOL maintaining its position within the top seven cryptocurrencies based on market capitalization, the dramatic 67% decline from its $253 September 2025 peak has significantly impacted both blockchain activity and derivatives markets. SOL futures open interest has contracted by 75% from the $13.5 billion peak recorded just five months prior.
Lower SOL prices reduce incentives, discouraging long-term holding
The current price weakness is also negatively affecting decentralized applications (dApps) operating on Solana. Revenue streams are declining universally, spanning staking services, decentralized exchanges, launchpads, and lending protocols. Market observers are growing concerned about a potential "death spiral," wherein declining prices erode incentives, ultimately diminishing the rationale for long-term SOL ownership.
The weekly revenue generated by dApps on Solana fell to $22.8 million, marking the weakest performance since October 2024. Notably, the memecoin launchpad Pump contributed $9.1 million in revenue during this seven-day period, representing 40% of total network revenue. By contrast, Ethereum's weekly DApps revenue reached $16 million, reflecting a 2% increase compared to the prior month.
In contrast to Solana, Ethereum's highest revenue-generating DApps include Sky, Flashbots, and Aave—critical infrastructure components for decentralized finance operations. Fundamentally, Solana exhibits significant dependence on retail user acquisition and the memecoin ecosystem, whereas Ethereum has established dominance in total value locked (TVL) and applications demanding enhanced decentralization.
The limited institutional appetite is evident in SOL exchange-traded funds (ETFs). Despite Solana's substantial transaction volume and runner-up position in TVL, these metrics haven't persuaded traditional market participants to invest in SOL ETFs launched by Bitwise, Fidelity, Grayscale, 21Shares, Coinshares, and REX-Osprey.
Though noteworthy, Solana's $2.1 billion in ETF assets under management remains 86% below Ethereum's $15.8 billion. Numerous investors have grown skeptical that Solana DApps usage will experience a significant surge in the near term, presumably as a consequence of excessive promotion surrounding memecoins and launchpad platforms.
To recapture bullish price momentum, SOL will probably require catalyst activity from segments such as artificial intelligence infrastructure and prediction markets. While these sectors demonstrate potential, the competitive landscape remains intense.
Currently, deteriorating SOL derivatives performance and Solana blockchain metrics serve as cautionary indicators. Additional setbacks could precipitate another price decline, placing the already fragile $78 support level in significant jeopardy.