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Key Takeaways:
- Solana’s TVL and stablecoin growth remain strong, but price fell 10% weekly.
- $4B in Open Interest wiped amid broader deleveraging across crypto markets.
- Institutional capital is rotating toward Ethereum, deepening the SOL/ETH divergence.
Solana’s on-chain fundamentals remain solid, with the network registering a 2.67% uptick in Total Value Locked (TVL) in the past 24 hours, steady user retention, and a 500% month-over-month surge in stablecoin volumes. The protocol’s throughput and ecosystem structure continue to show strength, signaling network health and usage resilience.
Yet, SOL’s market price tells a different story. The token is down nearly 10% this week, underperforming major Layer-1 peers and leading the top five in losses. This disconnect between fundamentals and price action is being driven by aggressive deleveraging and capital rotation toward Ethereum.
Over $4B in Open Interest Wiped Out as SOL/ETH Slides
Solana has seen over $4 billion in Open Interest (OI) wiped out in the past two weeks, part of a broader risk-off wave that also saw Ethereum lose $10 billion in OI. However, ETH is weathering the storm better—buoyed by a relative price surge and fewer ETF-related outflows—while SOL continues to lag.
The SOL/ETH pair has dropped 25% month-over-month, the worst monthly performance since 2022. Despite institutional players like DeFi Dev Corp. boosting their SOL holdings by 91% MoM to 1.18 million tokens ($204 million), Solana only posted an 11.57% gain in July versus Ethereum’s 48.76%.
Institutional Rotation Toward Ethereum Intensifies
Ethereum’s increasing wallet concentration—particularly those holding over 10,000 ETH—signals growing institutional confidence. In contrast, Solana is seeing a drop in large-holder participation, weakening its relative strength. As a result, the SOL/ETH ratio is now retesting key yearly support levels, threatening further downside without a decisive shift in sentiment or a risk-on catalyst.
Unless Solana can reclaim momentum and break above the $200 psychological barrier, it may continue trailing its L1 peers, especially as capital rotates toward Ethereum’s more favorable macro setup.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: ONyc Launches on Kamino, Unlocking Real-World Yield and Collateral Utility in Solana DeFi
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
