Solana Price Drop: Anatomy of Institutions and Volatility

Solana's Price Drop Despite Strong Institutional Inflows: Fundamentals vs. Market Volatility

4 November 2025 at 12: 20

Reading time: 2 minutes

Solana (SOL) recently fell through the crucial $180 barrier, despite institutional investment in the newly launched Solana exchange-traded funds (ETFs) reaching nearly $199 million in just one week.

Solana's price is hovering around $175, a 6,4% drop in a single day. This price correction, which began a week ago, has wiped out nearly 12% of its value. While ETFs managed by Bitwise, Grayscale, and 21Shares have pushed total assets above $500 million, the influx of institutional capital hasn't yet led to price stabilization.

Analysts often attribute the weakness to broader risk-off sentiment in global markets. Despite President Trump's recent announcement of a lower tariff, crypto investors remain skeptical, fearing a policy reversal that could trigger a sharp market correction.

Strong Foundations in an Uncertain Macro Context

While macroeconomic instability weighs heavily on Solana's price movements, its underlying fundamentals remain exceptionally strong. The blockchain recently reported annual revenue of $2,85 billion, growing almost thirty times faster than Ethereum's early performance. The network environment remains attractive to developers and business partners; Western Union, among others, is developing a stablecoin on Solana for global remittances.

Nevertheless, short-term traders are cautious. Technical indicators point to a consolidation of the Solana price below key moving averages, with crucial support around $172 and resistance between $188 and $192. The Relative Strength Index (RSI) is around 41, suggesting the asset is near oversold levels. At the same time, the MACD divergence indicates easing selling pressure, but a sustained recovery remains uncertain without a broader rebound in risk appetite.

For now, the short-term outlook for Solana remains bearish to neutral. A decisive break below the $172 support could pave the way for deeper declines towards $157 or even $142, levels that previously attracted strong buying during the October correction. On the other hand, defending the 200-day moving average at $179,78 and reclaiming the $189-$200 range could restore short-term bullish momentum.

Despite short-term volatility, analysts like Lark Davis believe Solana "wins" over Ethereum in terms of speed, scalability, and user growth. Long-term investors are confident that institutional inflows, combined with Solana's growing ecosystem, will eventually be reflected in Solana's price movement once global markets stabilize.

Frequently Asked Questions

What are the current price levels to watch out for Solana?
The main support lies around $172, while resistance occurs between $188 and $192. A break below $172 could put further negative pressure.

Will Solana Continue to Compete with Ethereum?
Yes, analysts point out that Solana continues to win in terms of speed and scalability, although they should not lose sight of developing with Ethereum either.

What does the recent drop mean for investors?
The current volatility may provide opportunities for entry, but investors should be cautious with their strategies and monitor broader market sentiment.

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