Solana Enters Bear Market as Price Drops 40% Despite ETF Inflows and Institutional Optimism
Solana has fallen nearly 40% from its September peak, slipping into bear market territory even as ETFs like BSOL and GSOL see steady inflows. Institutional optimism remains strong, but weak on-chain activity, macro risks, and fading DeFi momentum are weighing heavily on Solana’s recovery prospects.
Solana in bear market territory
Solana (SOL) is once again drawing attention as a fresh wave of exchange-traded fund (ETF) inflows and institutional optimism collide with underlying ecosystem headwinds.
Over the last week, Solana-linked exchange-traded products logged continuous net gains, with major Solana ETFs such as BSOL and GSOL recording their first full week of net inflows since launch. These flows arrived even as the crypto market in general and the price of Solana too dropped sharply.
At the same time, commentary from institutional voices has added fuel to the narrative. Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, publicly stated that Solana could capture the largest share of the expanding tokenization and stablecoin markets, putting it in a class of its own among competing chains.
That bullish framing arrived amid a market environment where macro risks - particularly expectations around US monetary policy and global trade tensions - remain elevated and have led to the current bear market.
However, the price action has not been uniformly smooth. Despite the inflows and positive institutional commentary, Solana’s price slipped from its September peak by close to 40%, reflecting some of the caution built into the market.
Analysts point to data showing that while ETFs are drawing capital, on-chain metrics such as active addresses and decentralised finance total value locked (TVL) have been showing signs of plateauing. This divergence between capital flows and usage metrics raises questions about Solana’s price level if new users and applications don’t follow the money.
In the near term, what will matter for Solana is whether ETF momentum can be sustained, how usage metrics evolve, and whether Solana can maintain a differentiated narrative amid a broader altcoin slump.
If capital continues to rotate into Solana on conviction rather than speculation, the stage may be set for renewed upside.
But if attention shifts elsewhere or macro risks intensify, Solana could find itself falling significantly further until usage catches up to enthusiasm.
Solana bearish scenario:
This week's fall through the April-to-November uptrend line around the 200-day simple moving average (SMA) at $179.94 doesn't bode well for the bulls.
For now the cryptocurrency is trying to find support around the 61.8% Fibonacci retracement of the April-to-September bull market at $155.88 and Tuesday's $146.05 low.
Any short-term bounce may soon fizzle out, though, with the are between the $170.34 October low to the 200-day SMA at $179.94 expected to cap.
A fall through Tuesday's $146.05 low would probably but the June low at $126.12 on the map.
Bearish pressure is likely to be maintained while there is no bullish reversal which takes Solana above Monday's $189.07 high.
Solana bullish scenario:
Only a bullish reversal and rise above Monday's $189.07 high would negate the current bearish pressure and could allow for the psychological $200.00 region to be revisited.
Solana daily candlestick chart
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