Solana (SOL) Price Prediction: The on-chain fundamentals are robust, but the coin price lags behind the market, with the SOL/ETH Exchange Rate hitting a key support level.

Solana (SOL) on-chain core indicators show resilience, with the total value locked (TVL) increasing by 2.67% over 24 hours, user retention remains stable, and the scale of stablecoins has surged by 500% month-on-month. However, its market performance significantly diverges from the fundamentals, with SOL dropping nearly 10% over the week, ranking at the bottom among mainstream Layer 1s. The SOL/ETH exchange rate continues to weaken, with a monthly decline of 25%, marking the worst monthly performance since 2022. Although institutions have significantly increased their holdings of SOL (DeFi Dev Corp's holdings increased by 91% month-on-month), funds are clearly leaning towards ETH, putting SOL at risk of a breakdown in the short term.

1. On-chain fundamentals are solid: TVL rise, stablecoin big pump, user retention stable Despite market volatility, the on-chain fundamentals of Solana (SOL) demonstrate resilience. As of the time of writing, its Total Value Locked (TVL) has risen by 2.67% in the past 24 hours. More notably, the on-chain stablecoin scale achieved an astonishing 500% month-on-month (MoM) growth, clearly evidencing the continued expansion of the Solana protocol layer's throughput capacity. At the same time, the user retention rate of the Solana ecosystem remains stable, providing a foundation for the long-term healthy development of the network.

2. The performance of the coin price is weak: a weekly fall of 10% leads mainstream coins, significantly deviating from the fundamentals In stark contrast to the strong on-chain data, SOL's market price performance has been weak. This week, SOL fell nearly 10%, significantly lagging behind other mainstream Layer 1 (L1) competitors, leading the decline among the top five cryptocurrencies by market capitalization. This divergence between price and fundamentals is the core contradiction currently faced by Solana.

3. Deleveraging Wave Impact: SOL Derivatives Sold Off, Funds Flowing to ETH The background of this round of decline is the market's aggressive deleveraging. Over the past two weeks, more than $4 billion in open interest has been liquidated across the entire cryptocurrency market. Among them, the Solana ecosystem has also not been spared. It is worth noting that despite Ethereum [ETH] experiencing a deeper liquidation of $10 billion in OI and continually facing the pressure of fund outflows from the spot ETF, its price performance (both in absolute and relative terms) has consistently outperformed Solana.

4. Institutional holdings struggle to reverse the downturn, SOL/ETH exchange rate hits a multi-year low Institutional dynamics highlight the relative weakness of SOL. Nasdaq-listed company DeFi Dev Corp (NASDAQ: DFDV) disclosed in its July financial report that its SOL Holdings surged by 91% month-over-month (MoM), currently holding 1.18 million SOL worth $204 million (a 112% increase MoM), accounting for a total supply of 124,315 SOL.

However, despite institutions aggressively increasing their holdings, SOL only rose 11.57% throughout July, far below the 48.76% rise of ETH during the same period. More critically, the SOL/ETH Exchange Rate plummeted 25% in July, marking the worst monthly performance since 2022.

5. Capital flow differentiation, SOL's short-term technical outlook under pressure The Institutional Flows are intensifying the divergence between SOL and ETH. ETH continues to attract smart money with a stronger return on investment (ROI), as evidenced by the significant increase in the number of wallet addresses holding over 10,000 ETH. In contrast, the number of such large holdings for Solana is decreasing, further weakening its relative strength.

As a result, as of the time of writing, the SOL/ETH exchange rate is re-testing a key annual support level on the daily chart. Given the clear capital rotation towards ETH, the risk of the exchange rate breaking below this support level has increased. In the absence of clear risk-on catalysts, Solana currently lacks sufficient momentum to re-challenge the psychological level of $200, and the technical outlook shows breakdown risk, with key support below around $120.

Conclusion: On-chain data of Solana (TVL growth, stablecoin scale big pump of 500%, stable user retention) demonstrate ecological resilience, but market performance (SOL weekly fall of 10%, SOL/ETH exchange rate monthly fall of 25% creating a multi-year low) seriously diverges from it. In the wave of large-scale deleveraging, funds are clearly flowing towards Ethereum (ETH). Despite institutions like DeFi Dev Corp significantly increasing their SOL holdings (monthly increase of 91%), it is still difficult to stop its relative weakness. The SOL/ETH exchange rate is approaching a key annual support level. In the context of continued fund outflow and lack of positive catalysts, Solana faces severe technical breakdown risks in the short term, and whether it can hold the $120 support level will become the focal point of the market.