Solana maintains solid on-chain data, but the price of SOL continues to decline significantly compared to Ethereum, despite liquidity and TVL both growing steadily.
Even though Solana's blockchain performance metrics are not declining, the SOL/ETH exchange rate has plummeted by 50%, with institutional investors continuing to prioritize Ethereum, meaning Solana struggles to attract new capital.
MAIN CONTENT
Solana's on-chain index remains stable, liquidity and TVL increase but do not help SOL's price recover.
Institutions are increasing their SOL holdings, but yields and the SOL/ETH exchange rate are far inferior to Ethereum, with insufficient upward momentum.
Large capital flows continue to prioritize ETH, putting SOL at risk of further decline without clear momentum.
Why does Solana's on-chain index remain good while the price plummets?
Despite positive on-chain metrics like a 2.67% increase in TVL over 24 hours, the growth rate of Stablecoins on the Solana network reached 500% per month, but SOL's price decreased by nearly 10% over the week, leading the decline among Layer 1 cryptocurrencies.
Although Solana's TVL, user retention rate, and throughput are strong, the price of SOL is facing significant downward pressure in the context of high risk and capital outflows from the market.
According to the Solana on-chain activity report, Glassnode, August 2025.
From a technical perspective, Solana is recording solid growth across platforms: TVL continues to rise, the amount of Stablecoins flooding into the ecosystem is increasing sharply, and network throughput is expanding. However, the price trend is opposite, indicating that the demand from investors outside the ecosystem (especially new capital flows) is not strong enough to push the price.
Notably, in the last 2 weeks, over 4 billion USD in Open Interest has been liquidated from the Solana ecosystem, reflecting strong deleveraging. Meanwhile, Ethereum also saw a deeper withdrawal of Open Interest, reaching 10 billion USD, combined with continued capital outflows from Ethereum ETFs, but ETH still maintains stronger growth than SOL.
Solana compared to Ethereum: Differences in performance and capital flows.
Although the on-chain activity data of both blockchains is strong, Ethereum continues to outperform Solana in both price performance and appeal to large capital flows from institutions.
"Smart money is shifting strongly to Ethereum as this platform provides superior ROI and plays a core role in the DeFi market."
Leon Waidmann, on-chain analysis expert, 2025, Glassnode/TradingView
In July, Ethereum recorded a price increase of 48.76%, while during the same period Solana only increased by 11.57% despite institutions increasing net purchases. The SOL/ETH exchange rate decreased by 25% in the month – the worst decline since 2022.
Institutional flows also clearly show a preference for ETH: the number of large wallets (>10K ETH) continues to increase, proving that institutions and whales still place their trust in Ethereum, while Solana has seen a decrease in large wallets – signaling the risk of capital shortage if the market continues to adjust.
Index Solana Ethereum Price increase in July 2025 11.57% 48.76% SOL/ETH decrease rate in July 25% (decrease) – Number of large wallets (over 10K Tokens) Decrease Increase Open Interest withdrawn in 2 weeks 4 billion USD 10 billion USD
This data shows that Solana is gradually losing appeal to institutional investors and smart money, creating further barriers to SOL's price recovery compared to ETH.
Institutional flow: Why does the institutional capital flow into Solana not push the price up?
According to the financial report for July 2025 from DeFi Dev Corp. (NASDAQ: DFDV), this company has significantly increased its SOL investment proportion, holding 1.18 million SOL worth about 204 million USD (up 112% month-on-month). However, the price movement for the month only increased slightly by 11.57%, lagging far behind ETH in the same period.
"Despite strong accumulation, SOL's price growth still lags behind ETH in the same period, while the SOL/ETH exchange rate decreased by up to 25% in the month – the lowest since 2022."
DeFi Dev Corp., July 2025 report.
Although the proportion of SOL in institutional portfolios has increased, the performance gap with ETH is widening. This reflects the lack of market consensus and weak physical demand, as large capital flows only play a temporary supporting role, not generating a spillover effect on prices or creating FOMO as expected.
Conversely, while the number of large whale wallets on Ethereum continues to rise steadily, the long-term trend still favors ETH as the largest DeFi blockchain base platform. This helps explain why SOL cannot rebound strongly despite continuous accumulation by large organizations.
Liquidity factor: Does TVL and user retention at Solana truly lead price trends?
Solana still maintains a TVL growth rate of 2.67% over 24 hours and a monthly growth rate of Stablecoins reaching 500%, while user retention remains stable. However, the price has still dropped nearly 10% compared to last week.
"We see that Solana is absorbing liquidity and users well, but the risk-off environment pulls speculative capital away from hot growth projects."
Glassnode cryptocurrency market report, August 2025.
The maintenance/growth of liquidity and TVL is a positive signal to protect the Solana ecosystem from major shocks, especially with DeFi projects, increasing Stablecoin liquidity will promote lending, trading, and yield farming activities. However, as market sentiment still prioritizes safe defensive strategies, capital flows mainly return to Ethereum, so the on-chain achievements only help SOL maintain its price level but do not create the expected upward momentum.
The clear separation between on-chain health and market spot prices indicates that actual demand and short-term capital flows are limiting price recovery for SOL.
SOL/ETH drops sharply: Is the risk of continuing at the bottom or a new opportunity?
The SOL/ETH exchange rate is retesting an important support level on the daily chart, as smart money continues to prioritize ETH. Without strong risk-on momentum, the likelihood of Solana breaking through the psychological threshold of 200 USD is very low.
"The current capital rotation has not shown new explosive momentum for the Layer 1 group beyond Ethereum; without FOMO signals from large capital, SOL may continue to lag behind the leading group."
TradingView market analysis report, August 2025.
A clear recovery scenario will only emerge if significant new impacts in terms of policies, technology products, or black swan events promote a wave of capital returning to risk assets. However, current data shows the market remains cautious, with no strong risk-on signals yet sufficient to reverse the short-term trend of the SOL/ETH exchange rate.
The lack of momentum for active capital to return to Solana continues to maintain the risk of a price decline in the short term, especially when the overall market is in a phase of deleveraging and seeking safe assets like ETH.
Comparing Solana and Ethereum: Which is the attractive platform for institutional capital?
The attractiveness comparison of these two major blockchains can be referenced through criteria such as price growth, capital flows, whale wallet counts, TVL size, and overall liquidity.
Criteria Solana Ethereum Price growth in July 2025 11.57% 48.76% Amount of institutional assets (DeFi Dev Corp.) 1.18 million SOL (204 million USD) – Difference in the number of whale wallets Decrease Increase Open Interest decrease in 2 weeks 4 billion USD 10 billion USD TVL & Stablecoin scale Increase 2.67%/24h and 500%/month Stable.
The above comparison table shows that while Solana consistently performs positively in terms of TVL size and institutional capital flows, it is still not enough to attract significant long-term investments as ROI and exchange rates with ETH are lacking. This reflects the sentiment of large investors and institutions who remain loyal to Ethereum as the market has not truly become risk-on again.
What conditions will help Solana reverse its trend?
SOL's price recovery depends on the emergence of new momentum such as breakthrough technology products, strong supportive policies, returning risk-on capital flows, or market developments that attract large amounts of capital back to Layer 1.
Currently, lacking these factors and capital flows are still fleeing from leveraged positions (deleverage) – it is very likely that SOL will continue to lose price regions compared to ETH in the medium term.
"A clear catalyst in technology, products, or new policies is needed to change the current defensive market sentiment towards Layer 1 assets like Solana."
Comprehensive analysis source CoinGlass, Glassnode, August 2025.
Only when risk-on sentiment returns under the combined impact of the above factors can large capital flows shift, laying the foundation for a strong price increase and helping SOL narrow the gap with ETH.
Lessons learned from Solana's volatility compared to the market.
A case study between Solana and Ethereum from 2024 to 2025 shows that on-chain metrics are just one part of the intrinsic strength. In reality, the determining factors for price often lie in smart capital flows, market risk-on momentum, and the capital appeal from institutions.
Even as the Solana ecosystem grows strongly in terms of TVL, users, and liquidity, the absence of net buying from new capital still prevents the price from breaking out. The strong rotation of funds into ETH during market defense phases further emphasizes the importance of active capital flows in shaping the price trends of major assets.
Institutional investors typically target stable assets that are easy to manage risk, so mature blockchains like Ethereum are always favored during unfavorable market conditions. This poses a challenge for Solana to find new catalysts to break the deadlock, and it is also an important lesson for other Layer 1 projects to consider strategies for attracting medium and long-term capital flows.
Frequently asked questions.
Solana's TVL is increasing, why is SOL's price still falling?
Although TVL and the amount of Stablecoins on Solana are growing, large speculative capital flows still prioritize Ethereum, so SOL's price does not receive strong support from on-chain metrics.
DeFi Dev Corp. buys more SOL but the price does not rise significantly, what is the reason?
Institutions are increasing purchases to support the underlying price but have not created a sufficiently large spillover effect, as the market prioritizes defensive strategies and capital flows still favor ETH during the same period.
What is the biggest difference between Solana and Ethereum in terms of capital flows?
Ethereum attracts large capital flows thanks to superior price performance, with the number of whale wallets continuously increasing, creating reliability for both individual and institutional investors.
What effect does the sharp drop in Open Interest have on SOL?
The sharp withdrawal of Open Interest indicates leveraged capital is exiting Solana, reducing buying power and pushing SOL's price into a weak position in the short term.
When can SOL recover well compared to ETH?
When new impacts are significant enough, such as breakthrough technology, strong risk-on capital flows returning, or special events that attract investors.
SOL's yield is far inferior to ETH, is there a chance of a reversal?
Currently, the potential for a reversal is limited due to cautious market sentiment; only when clear risk-on recovery signals appear can SOL attract capital back more strongly.
What factors should investors pay attention to when analyzing SOL?
It is advisable to monitor on-chain data, institutional capital flows, whale wallet fluctuations, and new catalysts in parallel to gain a comprehensive view of SOL's price prospects.
Source: https://tintucbitcoin.com/solana-lao-doc-du-hoat-dong-tang/
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