After failing to overcome the important resistance point of $98 on May 11, Solana lost around 15 percent in value, falling to $85. The recently increasing selling pressure in the crypto market has led to a significant retreat in Solana. After the price decline, it tested the $83.35 level for a while and found temporary support there. Currently, Solana is trading below the 100 moving average on the hourly charts and it has hit a new resistance line at $85.
Market Techniques and Analysts’ Opinion
A noteworthy detail in technical analysis was that there was no upward break with the downward trend on the chart. Ali Charts, one of the crypto market analysts, stated in his post on the social media platform This level is followed closely, especially by trading investors.
In his evaluation, Ali Charts pointed out that Solana’s failure to rise above $ 98 could push the price down to $ 78, which is the lower limit of the channel. The analyst stated that this level is of critical importance.
Analysts report that the first resistance in the upward movement of the price is $ 85, then $ 85.80. If there is no recovery, the $82 and $80 levels below stand out as strong support points. In the medium-term outlook, $75 can form an important base.
Notable Developments in Futures Markets
Funding rates on Solana’s perpetual futures markets soon turned into a highly negative trend. The funding rate, which was around 8 percent positive over the weekend, dropped to minus 3 percent on Tuesday. While normally these rates are expected to be close to zero and positive, negative funding rates indicate that short selling positions have increased and the majority in the market expects the price to retreat further.
After the last price drop, the leveraged buying desire in forward futures transactions, especially at levels below $90, has almost disappeared. This situation signals that short-term volatilities may increase.
Mini dictionary: Perpetual futures contract is a derivative instrument that has no expiration date in the stock exchanges and ensures the balance of long-short positions with the funding rate. A negative funding rate indicates that short (downward) positions are dominant.
Network Activity and Revenue Decline
Transaction volume in Solana’s decentralized exchange (DEX) ecosystem has shrunk by 56 percent since the beginning of the year. The weekly transaction volume, which reached 25 billion dollars in January, decreased to around 11 billion dollars as of the beginning of May.
Similarly, weekly revenue for applications on the Solana blockchain has dropped from approximately $35 million at the beginning of the year to $20 million now. The most revenue-generating projects such as Pump, Axiom Pro, Phantom and Jupiter have reached a share of 65 percent among all applications.
Solana still ranks second in terms of TVL with $5.9 billion. In this field, it is ahead of its competitors such as BNB Chain and Base.
Competition and Potential Transaction Manipulation
In terms of market share, Solana has been under pressure lately from rising competitors such as Hyperliquid and Base. While Hyperliquid showed aggressive growth in the continuous contract market, the Base chain began to reach a wider audience with the Coinbase infrastructure.
On the other hand, an unusual transaction volume was detected on the synthetic asset platform called PreStocks, which operates on Solana. Investigations show that a total of 1,600 wallet addresses account for 63 percent of the volume on the platform and that these movements may be for arbitrage or volume inflation.
Currently, investors continue to follow the $82–$83.5 range as the most important support zone in the near term.
