Solana Faces Short-Term Headwinds Despite Strong Network Fundamentals
Solana (SOL), trading at over $165 down over 5% in the past 24 hours, is the fifth-largest cryptocurrency by market capitalization as it
Quick overview
- Solana (SOL) is currently trading at over $165, down more than 5% in the past 24 hours, facing challenges from token unlocks and declining memecoin interest.
- Despite a recent price drop, Solana's network fundamentals remain strong, with a 14% monthly rise and significant trading volume leading to high fee capture.
- Concerns over maximum extractable value (MEV) and the decline of memecoins are adding pressure to SOL's performance, which is critical for its decentralized exchange activity.
- Institutional analysts maintain a positive long-term outlook for Solana, predicting a potential rise to $275 by late 2025 and $500 by 2029, despite current market challenges.
Solana SOL/USD, trading at over $165 down over 5% in the past 24 hours, is the fifth-largest cryptocurrency by market capitalization as it battles multiple headwinds that have slowed down its recent rise. Notwithstanding strong network fundamentals, doubts over upcoming token unlocks and declining memecoin interest has brought down investor attitude.
The lowest level in almost a week, the current price shows a clear drop from SOL’s most recent high of $185 on May 23. Since multiple technical and fundamental factors mix to create selling pressure, traders have started to question whether the coin would challenge its significant support level around $142.
SOL/USD Technical Analysis Points to Consolidation Phase
Technically, SOL appears to be oscillating between significant levels of support and opposition entering a consolidating phase. Currently falling between $165 and $184, the token resides in a vital zone that historically determines whether or not positive trends keep on.
Moving averages reveal a mixed picture; long-term indicators such as the 100 and 200-period averages still show positive directional bias. Shorter-term oscillators do, however, flash warning signs. Although the MACD suggests a decreasing bull trend with closing distance between the MACD and signal lines, stochastics and Relative Strength Index (RSI) have lately exhibited overbought conditions.
If bulls want to regain control, SOL has to break continuously over the $184-$ 185 resistance zone. Ignoring this could cause more bearish pressure, maybe targeted at the $142 support level under close attention by many traders.
Solana’s Strong Fundamentals Offset by Near-Term Challenges
Even with a price drop, Solana’s basic network features remain exceptional. Representing a 14% monthly rise, the blockchain comes second in total value locked (TVL) at $11 billion. More importantly than Ethereum’s $64.8 billion onchain activity is Solana’s scattered exchanges managing $94.8 billion in trading volume throughout the last thirty days.
Solana’s $48.7 million in fees over Ethereum’s $36.9 million over the same period shows great volume leadership in terms of fee producing. The effectiveness of Solana’s fee capture system reveals how well the network might benefit from its high-throughput capability.
Still, several factors are compromising SOL’s price performance. At present levels, valued at almost $600 million, the predicted unlocking of 3.55 million SOL tokens between June and August creates enormous selling pressure. Analysts believe that many of these coins were purchased from the insolvent FTX/Alameda estate at roughly $64, suggesting no early buyer downside protection.
Memecoin Decline and MEV Concerns Create Additional Pressure
The most recent decline in memecoin values derived from Solana causes still another degree of investor concern. Pudgy Penguins (PENGU) dropped 17% last week; FARTCOIN and POPCAT lost 20%; Official Trump (Trump) plummeted 24%. Memecoin trade has been a main driver of Solana’s DEX activity, therefore continuous drop in this market could severely affect SOL’s performance even more.
Moreover, constant concerns about maximum extractable value (MEV) keep the network structurally challenged. Some researchers have pointed out MEV as Solana’s “biggest problem,” so validators’ ability to reorganize transactions for profit has led to sandwich attacks and front-running acts affecting normal traders.
Solana Price Prediction and Long-Term Outlook
Despite near-term challenges, institutional analysts continue to see Solana’s long-term promise. Although Geoffrey Kendrick of Standard Chartered expects the token to underperform Ethereum over the next two to three years due of its high memecoin exposure, he forecasts SOL reaching $275 by late 2025 and $500 by 2029.
Solana’s current memecoin-driven growth strategy may be unsustainable, but research by the bank shows that over time future adoption across distributed physical infrastructure networks (DePIN), social apps, and decentralized finance could offer more sustainable development drivers.
Concurrent with this, SOL Strategies’ most recent $1 billion shelf prospectus filing and aggressive accumulation plan, including its choice to go “100% Solana” with 420,355 SOL tokens valued roughly $100 million, showcases continuous institutional trust in the long-term stability of the ecosystem.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
