As several headwinds intensified, Solana’s price hit the $150 wall

Solana's native token, SOL (SOL) has struggled to close above $150 since August 11. Despite showing consistent buying activity every time it tested the $125 support, SOL remains largely flat compared to four months ago.

What is more concerning is that the Solana network has experienced significant growth in deposits and activity during this period, but this expansion has yet to be reflected in the SOL price. Let's examine the reasons why the SOL price will remain below $150 and what needs to happen for it to break through this level.

Solana's memecoin frustration seems to have faded

Some market participants argue that SOL's recent boost was driven by a few airdrops, memecoins and pump.tun activity, which turned out to be unsustainable. Over the past thirty days, notable price corrections have seen Dogwhiphat (YF) down 38%, BONK (LDO) down 39%, Lido (LDO) down 43%, POPCAT down 48%, and Wormhole (W) down 31%. According to Dapradar, the volume of pump.fun decreased by 44% in the last week, now it has reached a total of 133.5 million dollars.

According to data from Dune Analytics, 98.6% of pump.fun memecoins failed to list on a decentralized exchange, which requires a minimum liquidation of $69,000. However, that didn't deter investors, as the pump's fun activities earned a $6.3 million payout last week. By comparison, AAVE had $11.72 billion in total value locked (TVL) but accumulated $4.4 million in fees over the same period.

In fact, 3% of traders earned more than $1,000 from memecoin trading, according to the latest analysis by @Adam_Tehc. Mesari data engineer Mike Cramer argues that unlike decentralized finance (DeFi) tokens, memecoins are more disruptive because of their “lack of real value or utility.” “Insiders or cartels create tokens,” Cramer added. […] Listen to them, and entice retail investors. Basically, memecoins, a significant driver of SOL demand, are now being explored.

However, it would be short-sighted to judge investor interest in SOL based on memecoin activity. Gito's liquid staking application and decentralized exchange Radium have seen increased fees in the last 30 days. From a TVL perspective, Solana Network's leaderboard includes credit and liquidity platform Kamino, Marinade staking solution and Jupiter decentralized exchange perpetual contracts.

Solana network activity is reduced and spot ETF opportunities are reduced

Unfortunately for Solana, the data shows a decline in activity across all sectors, including DeFi, NFT marketplaces, Web3 infrastructure, games, gambling and collectibles. In contrast, the top three DApps on the BNB Chain-Treasure Ship Game, Move Stake, and PancakeSwap gained 7% more users in the same 7-day period. This evidence suggests that the activity of the Solana network is decreasing, which will negatively affect the performance of the SOL token.

Related: Malicious ‘Bull Fixer' Chrome Extension Targets Solana Users

Additionally, part of the recent rally that pushed SOL's price above $185 in late July was fueled by pending demand for spot exchange-traded fund (ETF) listings in the United States. But the excitement has waned after the US Securities and Exchange Commission (SEC) raised concerns that SOL could be classified as silent, The Block reported. As a result, Cboe Global Markets decided not to continue with the 19b-4 forms, although this does not really close the door on the Solana ETF.

Nate Geraci, president of ETFStore, expressed doubt that the Spot Solana ETF would be approved by the current US government, citing the need for a “legitimate crypto regulatory framework.” So, despite Cboe's discussions with the SEC, analysts are skeptical about the approval of other crypto ETFs in the US in the absence of clear regulatory guidelines. As a result, what could have been a major boost to SOL prices was postponed.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.