- SOL futures funding rate turns negative, indicating bearish sentiment and increased short interest.
- Despite strong fundamentals like staking growth and record Q2 revenue, institutional concerns over MEV risks and validator control weigh on Solana’s adoption.
- Ethereum’s growing Layer-2 (L2) ecosystem and competitive transaction fees challenge Solana’s market share.
- Solana’s path to reclaiming the $180 price level remains uncertain amid rising competition and cautious institutional sentiment.
Solana Bears the Weight of Market Doubt as Funding Rate Turns Negative
Solana’s native token, SOL, faces mounting market skepticism as its perpetual futures funding rate flipped negative this week. This shift suggests that short-sellers are dominating the market, a rare scenario in the usually bullish crypto futures landscape.
Despite Solana’s impressive Q2 fundamentals, including market-leading blockchain revenue and a robust staking ratio, institutional investors remain cautious. The concerns primarily revolve around Maximum Extractable Value (MEV) risks and the lack of validator control, factors that have pushed companies like Robinhood and Coinbase toward their own Layer-2 solutions instead of Solana.
Solana Ecosystem Shows Strength Despite Competitive Pressure
While some traders doubt SOL’s ability to regain the $180 level last seen in May, its ecosystem tells a more optimistic story. Jito, Solana’s top decentralized application, boasts nearly 18 million SOL in total value locked (TVL) and continues to drive growth in MEV-optimized staking and DeFi services.
Furthermore, Solana’s 66.5% staking ratio significantly limits sell pressure, far surpassing Ethereum’s staking rate. Its annualized staking yield of 7.3% remains attractive for long-term holders.
Also Read: Solana Price Prediction: Why SOL is Crashing and What’s Next for This Crypto Giant
In Q2 2025, Solana generated $271.8 million in network revenue, outperforming both Ethereum and Tron, and marking its third consecutive quarter as the blockchain revenue leader.
Ethereum’s L2 Boom and Institutional Concerns Limit SOL’s Upside
Solana’s growth, however, is being overshadowed by the rapid expansion of Ethereum’s Layer-2 ecosystem, offering lower data fees and customizable validator control. Institutions reportedly prefer this model, citing MEV concerns as a reason to build on their own rollups rather than Solana’s mainnet.
As long as Ethereum’s rollup-centric model keeps costs low and transaction ordering predictable, Solana faces an uphill battle in attracting major institutional adoption.
Will SOL Reclaim $180?
With market sentiment tilting bearish and institutional adoption lagging, SOL’s path to $180 appears uncertain in the short term. Traders will closely watch for a turnaround in futures funding rates and potential ecosystem upgrades addressing MEV risks.
