Solana Underperforms Amid Market Deleveraging and FTX Distribution Concerns
## Solana Records Significant Decline Amid Broader Market Pressures
**Solana (SOL)** has experienced a marked downturn, with an 18% decline over the past week, positioning it among the worst-performing major cryptocurrencies in 2025. On September 25, 2025, **SOL** recorded a daily drop between 3% and 6.1%, trading in the range of $201.23 to $213.88. This performance contrasts sharply with its major counterparts; on the same day, **Bitcoin (BTC)** fell 1.4%, **Ethereum (ETH)** declined 4.2%, and **XRP (XRP)** backslid 5.7%.
## Market Mechanics and Deleveraging Drive Sell-Off
Several factors have converged to exert significant downward pressure on **Solana**. The cryptocurrency's futures open interest reached a record 71.8 million **SOL**, valued at $14.5 billion, suggesting a highly leveraged market. Perpetual funding rates flipped positive to 0.0043%, indicating an environment where long positions were vulnerable to liquidation. Indeed, over $45 million in **SOL** long positions were liquidated on September 25, contributing to a broader market-wide deleveraging event that saw more than $290 million in crypto liquidations, with **Solana** derivatives contracts alone accounting for $31.6 million in forced selling.
Network metrics further illustrate weakening fundamentals. Data from **DefiLlama** shows a 16% decrease in the Total Value Locked (TVL) in **Solana**'s DeFi protocols and an 11% drop in daily transactions over the past week. Memecoin activity, which once comprised over 60% of **Solana**'s Decentralized Exchange (DEX) volume in late 2024 and early 2025, has fallen below 30%, and daily DEX users have retreated from a peak of 4.8 million to under 800,000.
## Broader Implications and Future Outlook
Adding to the downward pressure is the impending $1.6 billion distribution from the **FTX** estate to creditors, scheduled for month-end. Analysts suggest that this large-scale payout, while a recovery milestone for creditors, introduces additional supply into the market, contributing to current selling sentiment. Furthermore, recent bullish corporate treasury news from **Forward Industries (NASDAQ: FORD)** and **DeFi Development Corp (NASDAQ: DFDV)** concerning **Solana** purchases appears to have been largely priced in, leading to a classic "buy the rumor, sell the news" reaction upon official announcements.
The pronounced underperformance of **Solana** against **Bitcoin**, **Ethereum**, and **XRP** underscores a "flight to quality" among investors, with capital seemingly rotating towards more established digital assets during periods of uncertainty. The market is also closely watching the **SEC**'s final decisions on multiple **Solana ETFs**, expected by October 16. A delay or denial could further prolong negative sentiment for the altcoin. Key technical support levels for **SOL** currently reside around $200-$205, with analysts indicating potential pullbacks towards $155 or even $120 if these levels fail to hold amidst continued bearish pressure and elevated volatility. The confluence of deleveraging, strategic investor exits, and regulatory uncertainties will likely keep **Solana** under scrutiny in the near term.