Can Solana Break Through $294 Again?...Eyes Revival Opportunity with Institutional Funds

▲ Solana (SOL)/AI generated image

Despite a sharp decline from its all-time high of $294, Solana (SOL) is testing its potential for a rebound, driven by institutional fund inflows and upcoming network upgrades.

According to 24/7 Wall St. on May 30 (local time), Solana reached an all-time high of $294 in January 2025 but subsequently underwent a strong correction as the meme coin speculation frenzy cooled and massive selling pressure mounted. 24/7 Wall St. noted that Solana has demonstrated resilience through multiple crises, pointing out that an investment of $500 in early 2021 would still be worth approximately $22,000 today.

Solana's rally to $294 was largely fueled by a meme coin trading frenzy. Some platforms made Solana a central chain for meme coin issuance and trading, significantly increasing fees and network activity. In December 2024, the Solana meme coin market size reached $25 billion, but as the hype faded, the demand supporting Solana's price also weakened.

Trading indicators also declined rapidly. Weekly decentralized exchange volume on Solana-based platforms decreased by 62% from $118 billion to $44.5 billion in just three weeks. Furthermore, the unlocking of over 11.2 million SOL, worth more than $2 billion, is scheduled for early 2025. A significant portion of this supply was acquired at deep discounts by entities like Galaxy Digital and Pantera Capital during the FTX bankruptcy auction. 24/7 Wall St. stated that these holders had a strong incentive to sell, and actual selling pressure hindered recovery.

The Solana holdings of the FTX bankruptcy estate also remain a burden. The estate still holds approximately $321 million worth of Solana and is releasing about $16 million to $17 million worth of SOL into the market monthly to repay creditors. This monthly influx of new supply acts as a constraint on Solana's price rapidly ascending.

However, positive variables were also presented for the long-term outlook. 24/7 Wall St. reported that institutional fund inflows, planned upgrades like Alpenglow, and the potential passage of the U.S. cryptocurrency market structure bill in 2026 support Solana's long-term recovery prospects. Bitwise believes that if the bill passes, increased regulatory clarity regarding tokenization and stablecoins could accelerate Solana network adoption, allowing Solana to challenge its all-time high again.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*