Solana (SOL) Price: Weekly 10% Decline Contrasts With Strong On-Chain Growth

TLDR

• SOL has fallen nearly 10% weekly despite strong on-chain fundamentals and 2.67% TVL growth
• Ethereum is outperforming Solana with SOL/ETH ratio down 25% in the last month
• Solana Mobile’s Seeker phone is now shipping to over 50 countries, potentially boosting adoption
• Price currently finding support around $157.70 Fibonacci level with resistance at $207
• Institutional flows show divergence: DeFi Dev Corp increased SOL holdings by 91% while smart money favors ETH

Solana has experienced a challenging price trajectory recently, falling nearly 10% over the past week despite maintaining strong on-chain metrics and ecosystem development. This divergence between fundamentals and market performance has left many investors questioning SOL’s short-term outlook.

The cryptocurrency’s Total Value Locked (TVL) has grown by 2.67% in the last 24 hours. User retention remains stable, and protocol-level throughput continues to scale impressively, with a 500% month-over-month increase in stablecoin growth within the ecosystem.

These positive metrics stand in stark contrast to the price action. SOL has dropped approximately 10% over the week, making it the worst performer among the top five cryptocurrencies by market capitalization.

The downward price movement comes amid aggressive market deleveraging. Over $4 billion in Open Interest has been eliminated in the past two weeks across the crypto market. For comparison, Ethereum has experienced an even deeper $10 billion Open Interest flush, compounded by persistent ETF outflows.

Despite these similar market pressures, Ethereum continues to outperform Solana in both absolute and relative terms. The SOL/ETH ratio has declined by 25% over the past month, marking its worst monthly performance since 2022.

Institutional Movement and Market Rotation

Institutional interest shows mixed signals for Solana. DeFi Dev Corp. reported a sharp 91% month-over-month increase in SOL exposure in its July earnings release. The firm now holds 1.18 million SOL, valued at approximately $204 million, representing a 112% increase in value month-over-month.

However, this aggressive institutional accumulation hasn’t translated to proportional price growth. While Solana closed the month up by 11.57%, Ethereum rallied by 48.76% in the same period.

Market data suggests that smart money is currently favoring Ethereum over Solana. ETH has seen a sharp rise in wallets holding over 10,000 ETH, while Solana is experiencing a decline in this large holder cohort. This trend is further weakening SOL’s relative strength in the market.

The SOL/ETH ratio was testing a key yearly support level at the time of writing. With capital rotation leaning heavily toward ETH, a breakdown below this support appears likely without a clear risk-on catalyst for the broader crypto market.

Seeker Phone Launch and Technical Outlook

A potential catalyst for Solana could be the recent launch of the Seeker phone by Solana Mobile. The device has started shipping to over 50 countries, potentially expanding Solana’s adoption and use cases.

The Seeker phone bridges Web3 infrastructure with mobile user experience, featuring hardware-level security that keeps private keys and seed phrases isolated from the application layer. Its integrated DApp store gives developers an alternative marketplace free from the heavy fees charged by traditional app stores.

From a technical perspective, SOL has found support around the 0.382 Fibonacci level at $157.70, a common reversal point for steep corrections. If this support holds, a potential double bottom pattern could form, providing a stronger foundation for a price reversal.

Solana Price on CoinGecko

The next major resistance level sits at $207, which previously capped SOL’s bull run. Breaking through this level could set up a potential 26% gain from current levels and mark a breakout from the ascending channel pattern that has been forming over the past four months.

Market Outlook

While the Seeker phone launch adds a new layer of adoption potential for Solana, the cryptocurrency faces near-term challenges. Without a clear risk-on trigger, SOL may struggle to reclaim the $200 psychological level.

The potential approval of a Solana spot ETF in October could serve as a stronger catalyst, potentially opening doors to new traditional finance demand that could accelerate price discovery.

For now, the market continues to show preference for Ethereum in this risk-off environment, with the SOL/ETH ratio remaining under pressure. The next few weeks will be crucial in determining whether Solana can reverse this trend and capitalize on its strong ecosystem fundamentals.