Solana price hits a wall at $150 as multiple headwinds intensify.

Solana’s native token, SOL (SOL), has struggled to close above $150 since August 11. Despite consistent buying activity each time it tests the $125 support level, SOL is largely flat compared to four months ago.

What is even more concerning is that while the Solana network has experienced significant growth in deposits and activity during this period, this expansion has not yet been reflected in the SOL price. Let’s take a look at what is keeping the SOL price below $150 and what needs to happen to get above this level.

Solana’s Mimecoin craze seems to have died down

Some market participants claim that the recent hype for SOL has been driven by several airdrops, mimecoins, and pumptoon activities that have proven unsustainable. Notable price corrections over the past 30 days include Dogwifhat (WIF) down 38%, BONK down 39%, Lido (LDO) down 43%, POPCAT down 48%, and Wormhole (W) down 31%. According to DappRadar, pump.fun’s trading volume has dropped 44% in the past week, currently standing at $133.5 million.

According to Dune Analytics, 98.6% of pump.fun memecoins are not listed on decentralized exchanges, requiring a minimum of $69,000 in liquidity. However, this has not deterred investors, as pump.fun activity generated $6.3 million in fees last week. In comparison, AAVE, which has a total locked value (TVL) of $11.72 billion, has accumulated $4.4 million in fees during the same period.

In fact, according to a recent analysis by @Adam_Tehc, only 3% of traders made more than $1,000 from trading Mimecoin. Messari data engineer Mike Kremer argues that Mimecoin is “far more disruptive” than decentralized finance (DeFi) tokens because it “lacks real-world value or utility.” Kremer adds that “insiders or cartels create tokens, (…) hype them up, and lure retail investors.” Essentially a major driver of SOL demand, Mimecoin is currently under scrutiny.

However, it would be short-sighted to assess investor interest in SOL solely on memecoin activity. The Jito liquidity staking application and the decentralized exchange Raydium have both seen increases in fees over the past 30 days. In terms of TVL, the Solana Network leaderboard also includes lending and liquidity platform Kamino, Marinade staking solution, and Jupiter, a decentralized exchange offering perpetual contracts.

Solana Network Activity Declines and Spot ETF Dividend Yields Decrease

Unfortunately for Solana, the data shows that the activity decline has affected all sectors, including DeFi, NFT marketplaces, Web3 infrastructure, gaming, gambling, and collectibles. On the other hand, the top three DApps on BNB Chain, Treasure Ship Game, Move Stake, and PancakeSwap, gained 7% more users during the same 7-day period. This evidence suggests that Solana network activity is declining, which is negatively impacting the performance of the SOL token.

relevant: Malicious ‘Bull Checker’ Chrome Extension Targeting Solana Users Discovered

Also, part of the recent surge that pushed SOL’s price above $185 in late July was fueled by the anticipated multiple requests for a spot exchange-traded fund (ETF) listing in the U.S. However, the excitement has since died down after the U.S. Securities and Exchange Commission (SEC) raised concerns about SOL potentially being classified as a security, according to The Block. As a result, Cboe Global Markets has decided not to file Form 19b-4, but that doesn’t necessarily close the door on the Solana ETF prospects.

Nate Geraci, president of ETFStore, doubts that a Spot Solana ETF will be approved by the current US government due to the need for a “legitimate crypto regulatory framework.” As a result, despite Cboe’s discussions with the SEC, analysts are skeptical that any other crypto ETF will be approved in the US due to the lack of clear regulatory guidance. As a result, a major potential catalyst for SOL prices has been postponed.