- Solana’s price has declined amid reduced on-chain activity and increased competition from other blockchains.
- Analysts remain optimistic about its future potential, citing possible ETF approval and favorable regulatory changes.
Solana has been experiencing unfavorable market conditions. Herein, especially on March 25, SOL’s price dropped by a massive 8%. From a broader perspective, SOL has failed to reclaim the crucial $150.
Notably, the digital asset has battled hard over the past three months with resistance. This has left investors and market pundits questioning whether the bullish momentum fueled by memecoin speculation and the artificial intelligence (AI) boom has lost steam.
At the time of press, SOL is swapping hands with $129.95 after a 5.19% decline in the past 24 hours.
Not everyone has lost hope in digital assets. Some analysts believe that it’s just a matter of time until the digital asset experiences a rally. These analysts are highly reliant on the potential approval of the Solana Spot Exchange-traded fund in the U.S.
If given the green light, SOL ETFs could drive institutional adoption and fuel a price surge. Additionally, the growth of tokenized real-world assets (RWA) on Solana, including stablecoins and money market funds, presents another bullish catalyst for the network.
Another prominent figure, Entrepreneur Nikita Bier, co-founder of TBH and Gas startups, is also a believer in Solana’s future. Bier believes the blockchain has “the fundamental building blocks for something to break out on mobile,” pointing to its seamless onboarding experience for mobile users.
He additionally pinpointed the favorable regulatory stance spearheaded by pro-crypto President Donald Trump, which could favor the broader cryptocurrency industry.
Despite the positive mentality, Solana is facing significant challenges. The decline in onchain activity, exacerbated by the fading memecoin frenzy, has led to reduced trading volumes and revenue from decentralized applications (DApps).
In the seven days leading up to March 24, Solana’s DApp revenues fell to $12 million from $23.7 million just two weeks earlier, while base layer fees dropped from $6.6 million to $3.6 million.
Additionally, competition from other blockchain networks is adding salt to the wound. Notably, according to data from defiLlama, BNB, initially built on Ethereum, has overtaken Solana in decentralized exchange volumes. Ethereum and BNB Chain are now leading in DEX volume, further pressuring SOL’s price action.
Meanwhile, trading activity on alternative platforms like Hyperliquid and Pendle has surged, diverting liquidity away from Solana.
Another setback came from the U.S. government’s recent strategic reserve. As we earlier reported, on March 6, President Trump signed a bill enabling strategic reserve for the U.S. Treasury to acquire Bitcoin (BTC).
Sadly, however, the executive order made no mention of altcoins like Solana, dashing hopes that the government would include SOL in its strategic reserves. This omission has contributed to investor uncertainty regarding Solana’s long-term positioning in the broader crypto landscape.