Solana (SOL) Faces Sharp Decline After $98 Resistance — What’s Next for Traders?

Key Highlights

• Solana’s native token retreated 15% following rejection at the $98 resistance level on May 11, currently hovering around $85
• Perpetual futures funding rates turned negative at -3%, indicating growing bearish market sentiment
• Weekly DEX transaction volume on Solana declined 56% from January’s $25B to current $11B levels
• Emerging competitors including Hyperliquid and Base are steadily capturing Solana’s market share
• Technical analyst Ali Charts suggests channel breakdown could drive SOL toward the $78 zone

The cryptocurrency Solana has experienced a significant pullback following its unsuccessful attempt to surpass the $98 price point on May 11. Since that rejection, the asset has declined approximately 15%, settling around the $85 mark.

Solana (SOL) Price

The cryptocurrency touched a low of $83.35 during the selloff before finding temporary support. Currently, SOL is positioned beneath its 100-hour simple moving average, while technical charts reveal a bearish trend line forming resistance at the $85 threshold.

Market analyst Ali Charts highlighted on X that Solana was unable to penetrate the upper boundary of its established trading channel at $98. According to the analyst’s assessment, this failure may lead to a downward retest toward the channel’s lower boundary around $78 — a critical price point now under close observation by market participants.

The most immediate resistance barrier is positioned at $85, followed by a secondary level at $85.80. A more substantial obstacle exists at $88.50, corresponding with the 50% Fibonacci retracement level from the recent downward movement. Should SOL breach the $82 threshold, the subsequent support area lies at $80, with $75 representing the next major floor.

Perpetual Funding Rates Turn Bearish

SOL’s perpetual futures funding rates experienced a dramatic shift to -3% on Tuesday, a sharp contrast from the +8% recorded on Saturday. Typically, this metric hovers around +9% during neutral market conditions. When funding rates enter negative territory, it indicates traders are paying premiums to maintain short positions, demonstrating excessive bearish positioning.

Source: Coinglass

Appetite for long leveraged positions has essentially evaporated since SOL broke below the $90 level during the weekend session.

Network Activity and Revenue Show Weakness

Transaction volumes across Solana’s decentralized exchange ecosystem have contracted by 56% since the beginning of January. Current weekly DEX volumes register at $11 billion, representing less than half of the $25 billion recorded at the year’s start.

Revenue generated by decentralized applications on the Solana network has similarly deteriorated, falling from approximately $35 million weekly in January to roughly $20 million per week presently. The leading revenue-producing applications on the network — Pump, Axiom Pro, Phantom, and Jupiter — collectively control approximately 65% of the platform’s DApp market share.

Despite these declines, Solana has maintained its position as the second-largest blockchain by total value locked (TVL) with $5.9 billion, staying ahead of BNB Chain’s $5.5 billion and Base’s $4.5 billion.

Hyperliquid has positioned itself as a significant rival through its commanding presence in the perpetual contracts market. Meanwhile, the Ethereum layer-2 solution Base continues expanding its footprint thanks to deep integration with Coinbase’s infrastructure.

A detailed investigation shared by X user lukecannon727 raised concerns about potential volume manipulation on PreStocks, a synthetic asset platform operating on Solana. The research discovered that 1,600 wallet addresses were responsible for nearly 63% of platform volumes, exhibiting patterns that could indicate either arbitrage strategies or artificially inflated trading activity.

SOL is presently trading in the vicinity of $85, with market participants closely monitoring the $82–$83.50 range as critical near-term support territory.

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