Why did the price of SOL fall?

Solana (SOL) dropped 4.4% in the last 24 hours, underperforming the overall crypto market, which fell 2.6%. Here’s why:

1. Solana Company share unlock – Early investors sold shares linked to SOL, raising concerns about related selling pressure.
2. Regulatory delays – The U.S. government shutdown pushed back approvals for crypto ETFs, including Solana’s.
3. Technical breakdown – SOL’s price fell below important moving averages, triggering automated selling.

Deep Dive

1. Corporate Share Unlock Creates Market Worries (Negative Impact)

Overview:
On October 21, Solana Company (HSDT) allowed early investors to sell $500 million worth of shares connected to its SOL holdings. This caused the stock to drop 60% this week, sparking fears that SOL tokens might be sold off to cover losses.

What this means:
HSDT holds 2.2 million SOL tokens (valued at about $404 million). The sharp drop in HSDT’s stock price has made investors nervous, worried that if HSDT faces financial pressure, they might have to sell SOL tokens. So far, no direct selling of SOL on the blockchain has been seen.

What to watch:
Look out for HSDT’s next earnings call, expected in November 2025, for updates on how they’re managing their SOL holdings.

2. Regulatory Delays Affect Market Sentiment (Mixed Impact)

Overview:
The U.S. Securities and Exchange Commission (SEC) delayed decisions on Solana ETF applications because of the ongoing U.S. government shutdown, now lasting 20 days. Despite this, the chances of approval remain high (82% according to Polymarket), but the delay has cooled short-term excitement.

What this means:
Last week, SOL’s price rose 7% as traders anticipated ETF approval. With the government shutdown continuing and no clear end in sight, some traders have pulled back from their positions.

3. Technical Support Levels Broken (Negative Impact)

Overview:
SOL’s price fell below its 7-day simple moving average (SMA) of $189.77 and 30-day SMA of $208.89. Technical indicators like the MACD and RSI suggest bearish momentum. The $180–$186 price range had been a support zone since August, but closing below $184 triggered stop-loss orders. The next key support level is the 200-day SMA at $175.01.

What this means:
Breaking these support levels often leads to more selling as traders try to limit losses.

Conclusion

Solana’s recent price drop reflects a mix of corporate uncertainty, regulatory delays, and technical weaknesses. Despite these challenges, the Solana network remains strong—Grayscale’s report shows $1.2 trillion in decentralized exchange (DEX) volume year-to-date. Short-term price movement will depend on how stable HSDT’s situation is and clarity around ETF approvals.

Key watch: Can SOL bounce back above $186 (the 23.6% Fibonacci retracement level) by Wednesday’s U.S. crypto regulation roundtable?

What could affect the price of SOL?

Solana’s price is balancing between upcoming network improvements and delays in regulatory approvals.

1. Alpenglow Upgrade (Positive Outlook) – Aiming for transaction finality in 150 milliseconds by 2026.
2. ETF Approval Delays (Mixed Outlook) – SEC postponements versus a strong chance of approval.
3. Whale Activity (Neutral Outlook) – Conflicting signs of buying and selling by large holders.

In-Depth Look

1. Network Upgrades & Speed Improvements (Positive Outlook)

What’s Happening: Solana plans to launch the Alpenglow upgrade by early 2026, which will speed up transaction finality from about 12 seconds to just 150 milliseconds. Alongside this, Firedancer—a new validator client—aims to handle over 1 million transactions per second. Recent upgrades have already increased the network’s capacity by 66% (VanEck).

Why It Matters: Faster transaction times can attract big financial players and decentralized finance (DeFi) apps, increasing demand for SOL tokens. Past upgrades that boosted network capacity have led to SOL price increases of over 25%.

2. ETF Approval Delays vs. Institutional Interest (Mixed Outlook)

What’s Happening: The U.S. Securities and Exchange Commission (SEC) delayed decisions on seven Solana ETF applications, including those from Fidelity and VanEck, due to a government shutdown. However, experts from Bloomberg estimate there’s still a 90% chance these ETFs will be approved by October 2025. Meanwhile, large investments like Grayscale’s $146 million SOL trust and CoinShares’ staking ETF show strong institutional interest.

Why It Matters: If approved, these ETFs could boost SOL’s price significantly, similar to Bitcoin’s 75% price jump after its ETF approval in 2024. But delays can cause short-term price drops, as seen with SOL’s recent 23% decline over 30 days, partly due to uncertainty from the shutdown.

3. Large Holder (Whale) Activity (Neutral Outlook)

What’s Happening: In October 2025, large holders moved $41 million worth of SOL to exchanges, possibly signaling selling, while others bought $23 million worth off exchanges. Galaxy Digital unstaked 224,000 SOL (about $41 million), and new wallets purchased SOL at support levels between $175 and $186.

Why It Matters: These mixed signals suggest potential price swings. Net outflows from exchanges indicate some holders are accumulating SOL for the mid-term, but large unstaking events could lead to selling pressure if those tokens hit the market.

Conclusion

Solana’s price outlook depends heavily on the successful launch of the Alpenglow upgrade and clarity around ETF approvals by late 2025. While network improvements could boost developer activity and decentralized finance growth, regulatory delays and unpredictable moves by large holders add short-term risks. Keep an eye on the SEC’s updated deadlines for ETF decisions and progress on the Alpenglow testnet to gauge SOL’s next move.

What are people saying about SOL?

Solana’s social buzz swings between big optimism and cautious pauses. Here’s what’s trending right now:

1. ETF excitement pushes price predictions above $500
2. Technical signals warn of resistance near key price levels
3. Community debates risks of meme-driven growth

Deep Dive

1. @VirtualBacon0x: "$440–$600 SOL possible with ETF approval" — bullish

"SOL could hit $700–$800+ if it regains its previous Bitcoin ratio high... ETF approvals expected by October 2025"
– @VirtualBacon0x (212K followers · 3.8M impressions · 2025-05-20 13:02 UTC)
View original post
What this means: This is positive news for SOL. If ETFs (Exchange-Traded Funds) get approved, it could open the door for big institutional investors, potentially driving monthly gains of 40-50%.

2. @Neurashi: "Bearish breakdown below $176.8" — bearish

"Entry: $178.55 → Targets: $180.85 → $183.25 | Stop Loss: $176.8"
– @Neurashi (89K followers · 1.2M impressions · 2025-05-22 22:03 UTC)
View original post
What this means: Short-term outlook is negative. SOL is struggling to stay above $180, with technical indicators showing it might be overbought after a strong 42% monthly rally, leading some investors to take profits.

3. @Kdotcheta: "Solana community work ethic > Ethereum" — mixed

"75% of Q1 revenue came from meme projects... but developers keep delivering"
– @Kdotcheta (56K followers · 920K impressions · 2025-07-07 15:56 UTC)
View original post
What this means: The long-term outlook is cautiously optimistic. While much of Solana’s recent revenue comes from speculative meme coins, the developer community remains active and productive, showing strong grassroots momentum.

4. Grayscale: "SOL now crypto’s financial bazaar" — bullish

"Handled $1.2 trillion in decentralized exchange volume this year... 2 million monthly active meme coin users"
– Grayscale Research (4.1M followers · Report dated 2025-10-21)
View analysis
What this means: This is a strong institutional endorsement. Grayscale compares Solana to a bustling marketplace with over 500 apps and $5 billion in yearly fees, highlighting its growing importance in crypto finance.

5. @johnbollinger: "SOL chart demands attention" — mixed

"Reversal patterns forming near $190 support... MACD indicator nearing bullish crossover"
– Technical analysts (18K+ quotes aggregated · 2025-10-20)
View context
What this means: The technical picture is mixed but leaning positive. SOL’s 7% staking yield and upcoming Firedancer upgrade could help offset recent weekly losses of about 10%.

Conclusion

The overall view on Solana is mixed. Optimism around ETF approvals and institutional interest is balanced by concerns over volatility driven by meme coins. Grayscale’s description of Solana as a “financial bazaar” with a large developer base points to long-term potential. However, with 62% of June’s revenue coming from speculative assets, there’s a risk that some investors might be overlooking. Keep an eye on the $180–$186 support range: If Solana closes below this weekly, it could trigger sell-offs down to $160. Holding above this level could pave the way for a test of $250 by November.

What is the latest news about SOL?

Solana is making waves with new open-source projects and strong support from big investors, even as it faces some company challenges. Here’s the latest update:

1. “Steal This” Perp DEX Code (October 20, 2025) – Solana’s founder shared experimental code for a decentralized futures trading platform, sparking new ideas in decentralized finance (DeFi).
2. Grayscale’s Big Report (October 21, 2025) – A major investment firm named Solana the most active blockchain in the crypto space.
3. Solana Company Share Unlock (October 21, 2025) – Early investors were allowed to sell shares, causing the company’s stock to drop by 60%.

In-Depth Look

1. “Steal This” Perp DEX Code (October 20, 2025)

What happened: Anatoly Yakovenko, Solana’s co-founder, released the code for “Percolator,” a prototype for a decentralized platform where users can trade futures contracts without a middleman. The platform uses a special system called “sharded order books” to keep markets separate and speed up trades. Yakovenko encouraged developers to use or modify this code, showing Solana’s commitment to open collaboration.

Why it matters: This move highlights Solana’s focus on supporting developers and could speed up innovation in DeFi. However, since the code is open for anyone to use, there’s a chance of legal or ownership disputes if companies use it commercially without giving credit. (Yahoo Finance)

2. Grayscale’s Big Report (October 21, 2025)

What happened: Grayscale, a well-known investment firm, reported that Solana leads in decentralized exchange (DEX) trading volume with $1.2 trillion so far this year. It also highlighted Solana’s role in decentralized physical infrastructure networks (DePIN), like Helium, which has 1.5 million users. Solana processes about 1,039 transactions per second with very low fees (around $0.001), supporting over 500 applications.

Why it matters: This report confirms Solana’s strong position in the crypto world and its solid technology. But there are concerns, such as the concentration of network validators (which could affect decentralization) and a large portion of revenue coming from one project, Pump.fun, which may be less stable. (Bitcoinist)

3. Solana Company Share Unlock (October 21, 2025)

What happened: Solana Company (ticker: HSDT) unlocked $500 million worth of shares from a private sale made in September. This led to a 22% drop in the stock price during the day. The company holds 2.2 million SOL tokens (about $405 million), but some investors are worried about how the company manages its funds.

Why it matters: This share unlock and stock drop suggest some investors are losing confidence in Solana-related stocks. On the other hand, the company’s ongoing purchase of SOL tokens through staking and market dips might help keep the token’s market liquidity stable. (Decrypt)

Conclusion

Solana’s community is energized by new technical projects and strong backing from big investors, but company-related ups and downs highlight some risks. Will the open-source approach from Yakovenko lead to more collaboration and growth in DeFi, or will doubts about Solana-linked investments affect the broader market?

What is expected in the development of SOL?

Solana’s roadmap is focused on improving scalability, attracting institutional users, and building market infrastructure.

1. Alpenglow Consensus Upgrade (Late 2025) – Aims to speed up transaction finality to 150 milliseconds.
2. Firedancer Validator Client (2026) – Designed to handle over 1 million transactions per second (TPS).
3. Internet Capital Markets (2027) – Plans to create global tokenized markets.

Deep Dive

1. Alpenglow Consensus Upgrade (Late 2025)

Overview:
The Alpenglow upgrade (SIMD-0326) will reduce the time it takes for a transaction to be finalized on Solana from about 12 seconds to just 150 milliseconds. This means transactions will settle almost instantly. The upgrade also simplifies how the network reaches consensus and introduces asynchronous program execution (APE), which allows developers to build applications like high-frequency trading platforms. Testing started in August 2025, with a full launch expected by early 2026 (Blockworks).

What this means:
This is good news for SOL because faster transaction finality can attract institutional traders and decentralized finance (DeFi) projects that need quick execution. However, there is a risk that higher hardware requirements could lead to fewer validators, which might centralize the network.

2. Firedancer Validator Client (2026)

Overview:
Firedancer is a new validator client being developed by Jump Crypto from the ground up. It removes software limitations to process over 1 million transactions per second per core in testing. This could significantly increase Solana’s capacity as hardware improves. The development is ongoing, with a gradual rollout planned throughout 2026 (Solana Blog).

What this means:
This upgrade is cautiously optimistic. Firedancer will improve network reliability, but its success depends on how many validators adopt it. Having multiple validator clients (like Jito-Solana and Sig) helps avoid single points of failure but could complicate governance.

3. Internet Capital Markets Roadmap (2027)

Overview:
By 2027, Solana aims to become the foundation for globally accessible tokenized markets. The plan includes:

• Application-Controlled Execution (ACE): Allows smart contracts to control the order of transactions, preventing front-running and other exploitations known as MEV (Miner Extractable Value).
• DoubleZero: A private fiber network replacing the public internet for Solana transactions, cutting latency to under 1 millisecond (Cointelegraph).

What this means:
This is a positive long-term development. Institutional adoption of tokenized assets like real-world assets (RWAs) and stocks could increase demand for SOL as collateral. However, regulatory challenges remain a significant obstacle.

Conclusion

Solana’s roadmap combines near-term technical improvements (Alpenglow and Firedancer) with a strategic vision to enter institutional finance through its 2027 Internet Capital Markets initiative. While these upgrades could strengthen Solana’s position as a fast and scalable blockchain, concerns about validator decentralization and regulatory issues still exist.

How Solana’s focus on market microstructure will change its role in global finance compared to Ethereum’s rollup-based approach remains to be seen.

What updates are there in the SOL code base?

Solana’s latest software updates focus on making the network faster, more scalable, and more decentralized.

1. Alpenglow Consensus Testing (August 2025) – Aims to finalize transactions in just 150 milliseconds, which is about 80 times faster than the current 12 seconds.
2. Firedancer Client Development (Ongoing) – Jump Crypto is building a new validator client designed to handle over 1 million transactions per second (TPS).
3. Block Capacity Boost with SIMD-0256 (July 2025) – Increased the network’s processing power by 25%, allowing more transactions to be processed in each block.

Deep Dive

1. Alpenglow Consensus Testing (August 2025)

What it is: Alpenglow is a new system that replaces Solana’s current way of confirming transactions (called TowerBFT) with a hybrid model. It combines two components: Votor, which speeds up block approvals, and Rotor, which improves how data is shared across the network.

Why it matters: This upgrade aims to reduce the time it takes to confirm a transaction from 12 seconds down to just 150 milliseconds. That’s fast enough to compete with internet speeds, making it possible for applications like high-frequency trading and real-time games to work smoothly on Solana.

Impact: Faster transaction finality is great news for Solana. It could attract big institutional traders and improve the experience for users of apps that need quick responses, such as gaming or payment platforms. (Source)

2. Firedancer Validator Client Progress (Ongoing)

What it is: Jump Crypto is developing Firedancer, a new software client for Solana validators (the computers that confirm transactions). This client aims to reduce reliance on the current dominant client called Agave.

Why it matters: Firedancer is being tested to handle over 1 million transactions per second by optimizing how tasks are processed in parallel. Early tests show it requires about 30% less hardware power than Agave, which could make running a validator more accessible.

Impact: This development is cautiously optimistic for Solana. While Firedancer could make the network stronger and faster, its success depends on whether enough validators choose to use it. (Source)

3. SIMD-0256 Block Capacity Increase (July 2025)

What it is: This upgrade increased the network’s block compute units (a measure of processing power) from 48 million to 60 million, allowing 25% more transactions to be processed in each block.

Why it matters: By increasing capacity, Solana can handle more transactions during busy times, reducing delays and failed transactions. After this upgrade, failed transactions dropped by 22%, and validators reported stable network performance.

Impact: This is positive for Solana’s growth, especially for decentralized finance (DeFi) and NFT projects that need high throughput. However, there are ongoing concerns about maintaining decentralization as the network scales. (Source)

Conclusion

Solana’s recent updates focus on making the network faster (Alpenglow), more scalable (SIMD-0256), and more resilient through software diversity (Firedancer). While these improvements tackle key technical challenges, the network still needs to ensure that increasing speed and capacity doesn’t come at the cost of decentralization. The adoption of new validator clients like Firedancer could be a critical factor in Solana’s future success.