Key Points
- Solana (SOL) experiences a 6% increase, however, the total value of assets locked in Solana’s chain has dropped by nearly 50%.
- Solana-based meme coins struggle to recover as market dynamics shift and traders become more cautious.
Solana, a significant player in the cryptocurrency market, saw a nearly 6% increase on Friday. This rally was in parallel with Bitcoin, the largest cryptocurrency, which regained $80,000 as support. Despite this, the total value of assets locked in the Solana chain has dropped by $5.26 billion from its peak, a decline of almost 50%. This decline indicates a decrease in demand and relevance for the chain due to shifting market dynamics.
State of Solana
The total value of assets locked is a crucial metric used in decentralized finance (DeFi) to measure investor confidence, a chain’s relevance, and demand among cryptocurrency traders. Currently, Solana appears to be gradually losing relevance in the ongoing crypto market cycle. The total value locked (TVL) in Solana has dropped nearly 50%, from its peak of $12.191 billion to $6.939 billion. The crash of meme coins on the Solana chain is a significant factor in this decline.
In the past month, the top 10 protocols on the Solana blockchain have seen up to a 40% decrease in TVL. The three main catalysts influencing this change include Bitcoin’s flash crash, controversies surrounding Solana-based meme coins MELANIA (MELANIA) and LIBRA (LIBRA), a price decline in the Official Trump (TRUMP) token, and crypto traders becoming more risk-averse due to U.S. macroeconomic developments.
Solana Meme Coin Market Analysis
According to CoinGecko, the Solana meme token category metrics show a slight recovery. The market cap of all tokens in this category has climbed to $8.949 billion. However, two of the top five Solana-based memes, TRUMP and Bonk (BONK), have yielded negative returns in the past 24 hours. The other three, Dogwifhat (WIF), Pudgy Penguins (PENGU), and ai16z (AI16Z), have begun their recovery in the past day.
The data suggests a shift in market dynamics with capital and traders’ attention moving from the “meme coin” sector to other categories of crypto tokens. The launch of a meme coin associated with the U.S. President, which led to significant losses and a liquidity drain across other meme coins on the Solana network, is considered a negative catalyst for the category.
Market Movers and Solana Catalysts
CME Group, the world’s largest futures exchange, announced the launch of Solana futures, a positive development for the Ethereum competitor. This news follows MetaMask’s roadmap release where the browser-based cryptocurrency wallet discusses the addition of native Solana support in May 2025.
Solana is the first non-EVM chain supported by the browser wallet. It adds the functionality to buy, sell, swap, and interact with dApps across the entire SOL ecosystem. All existing users of the chain will gain access to the same features of MetaMask that Ethereum users enjoy, along with other chains supported by the wallet.
Bitcoin’s recovery and regaining of $80,000 support after a flash crash on Friday is a key driver in the crypto market. Solana and Bitcoin have a 0.83 correlation in the three-month timeframe. Therefore, changes in Bitcoin’s price significantly influence the Solana price trend.
Solana Price Forecast
Solana could potentially disrupt its multi-month downward trend with a daily candlestick close in the resistance zone between $147.09 and $166.42. These two levels mark the upper and lower boundary of a fair value gap, indicating a market inefficiency. If SOL surpasses the resistance zone, the next key level for traders is resistance at $180.
The $180 level has acted as support for nearly three months, making it a crucial level for SOL. A daily candlestick close above this level could prepare Solana for a retest of the $200 level, a significant milestone for SOL.
Technical indicators on the daily timeframe, RSI, and MACD support this thesis. RSI reads 32 and is sloping upwards, above the “oversold” zone for Solana. MACD shows waning negative momentum underlying SOL price trend.
Ryan Lee, Chief Analyst at Bitget Research, shared his insights on Solana’s recent price action, the recent events like the Bybit hack and Bitcoin ETF outflows. He noted that new tariffs on China, Canada, and Mexico have impacted the crypto market, contributing to Solana’s 40% TVL decline. This situation was exacerbated by the Bybit hack and over $2 billion in Bitcoin ETF outflows, reflecting weakened investor confidence and liquidity strain.
Lee suggested that Solana faces stagnation if trade tensions escalate, inflation rises, or risk aversion intensifies. The trajectory hinges on Bitcoin’s price trend, China’s response, Federal Reserve actions, and whether Trump’s regulatory support counterbalances macroeconomic headwinds. He indicated that critical developments are expected within the next 30 days, making this period pivotal for market clarity.
