Key takeaways:
– SOL derivatives signal bearish sentiment as funding rates hit 0% and put (sell) options trade at a premium.
– While Solana leads in DEX volume, it faces stiff competition from Hyperliquid in the perpetual contracts sector.
Solana’s native token SOL faced an 11% decline over three days after peaking at $97.70 on Monday. A Thursday drop to $87 liquidated about $25 million in leveraged long positions, denting trader sentiment. SOL derivatives point to fear of further downside and a lack of conviction from bulls, raising the odds of a retest of the $80 level.
The SOL perpetual futures annualized funding rate was near 0% on Thursday, indicating weak demand for longs. Bears have dominated leverage demand for the past month, an unusual pattern in crypto where traders are often optimistic; under neutral conditions the cost of capital and exchange risks typically push funding rates higher.
Options markets confirm professional traders’ discomfort that the $87 level will hold. The 30-day delta skew (put-call) jumped to 12% on Thursday, meaning puts traded at a premium to equivalent calls. Whales and market makers are reluctant to hold downside exposure even though SOL remains about 70% below its all-time high. Part of this bearishness is linked to softer demand in the decentralized applications (DApps) sector.
Solana DApps revenue fell to $22 million, its lowest in 18 months, down from $36 million two months earlier. This weakness isn’t unique to Solana—BNB Chain saw a 52% DApps revenue decline over the same period—but rising competition in perpetual contracts trading is notable, with Hyperliquid dominating that market.
While Solana remains the leader in decentralized exchange (DEX) volumes—driven by platforms like Pump, Raydium and Orca—blockchains built for perpetuals trading such as Hyperliquid, Edgex, Zklighter and Aster now account for more than 80% of total perpetuals volume.
Weak on-chain metrics and bearish derivatives are delaying SOL’s recovery. The launch of an officially licensed S&P 500 Index perpetual futures contract on Hyperliquid, developed by Trade[XYZ] and available to eligible non-U.S. users, likely softened demand for SOL by expanding tokenized equities and perpetuals options.
SOL’s market capitalization is about $51 billion, roughly a 42% discount to competitor BNB at $88 billion. Solana’s total value locked (TVL) stands near $6.9 billion versus BNB Chain’s $5.7 billion. Over the past 30 days, Solana’s network fees totaled about $20.8 million compared with BNB Chain’s $9.1 million, per DefiLlama.
Some companies that adopted SOL-focused treasury strategies, including Forward Industries (FWDI US) and DeFi Development Corp. (DFDV US), are currently underwater on their holdings, adding to negative sentiment. Overall, the combination of weak on-chain activity and subdued derivatives markets suggests a sustained bullish move above $110 is likely to take longer than anticipated.
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