Why Is Solana Falling Harder Than Bitcoin, Ethereum and XRP This Week?

Solana has been experiencing notable underperformance compared to leading cryptocurrencies such as Bitcoin, Ethereum, and XRP. Analysts suggest that as investors take profits and deleverage, Solana could face a more significant impact due to its volatility, as reported by Decrypt.

“According to data from CoinGlass, the last 24 hours have seen market-wide liquidations surpass $290 million. Assets that are highly leveraged and less liquid, like Solana, have faced sharper declines,” stated Dean Chen, an analyst from crypto exchange Bitunix.

Solana derivatives have accounted for liquidations totaling $31.6 million over the past day, while Ethereum and Bitcoin faced higher liquidations of $68.5 million and $52.2 million respectively. Currently, Solana is trading at approximately $213, having decreased nearly 3% within the past day and over 9% in the last week, according to crypto tracking platform CoinGecko.

Chen noted that recent optimistic news surrounding Solana’s treasury—specifically, the collaboration with Forward Industries and DeFi Development Corp.—had already been factored into the market. The announcements regarding these investments were made before the actual acquisition.

Solana Treasury Firm Holdings Could Double as Forward Industries Unveils $4 Billion Raise

Forward, which trades on NasdaqCM under the FORD symbol, had disclosed a $1.65 billion equity raise and its intention to buy Solana days before acquiring the SOL tokens. Meanwhile, DeFi Development, listed under the DFDV ticker, has been purchasing Solana tokens since April.

“Once these announcements were made public, the market followed a familiar pattern: ‘buy the rumor, sell the news.’ This prompted speculation-driven selling and accelerated the correction,” he explained.

The recent decline in SOL price has led users on Myriad, a prediction market owned by DASTAN, the parent company of Decrypt, to question whether the coin will achieve a new all-time high before year-end. Presently, predictions show only even odds that Solana will exceed its previous record of $293.31 in 2025—down from a nearly 65% chance of achieving this earlier in the week.

Other contributing factors are also evident, according to Gordon Grant, a portfolio manager and head of derivatives at Bitwise, a crypto index fund manager. He pointed out that the upcoming large distribution from the FTX estate at month-end has added negative pressure to the market.

“In terms of short-term positioning, the 15% decline from $250 to $210 is not unexpected, especially considering that SOL had surged over 50% from its levels earlier in August,” he noted.

According to the FTX Recovery Trust, it was announced last week that they would be initiating the distribution of another $1.6 billion worth of funds to creditors by the end of the month.