Solana News Update: Security Breaches and Structural Challenges Cast a Shadow Over Solana's Staking Growth

Solana Faces Renewed Downward Pressure Amid Network and Security Challenges

Solana (SOL) has slipped beneath its upward trendline established in November, indicating a resurgence of bearish momentum. The cryptocurrency is currently grappling with a decline in network engagement, outflows from exchange-traded funds (ETFs), and recent security breaches. Earlier this month, SOL briefly touched the $145 mark, but both technical analysis and blockchain data point toward the possibility of a further drop, potentially approaching $100. Market analysts are keeping a close eye on crucial price levels as shifting investor attitudes and changes in capital distribution reshape the landscape.

Technical charts reveal a prominent bear flag formation, which often signals the potential for a more pronounced decline if current market conditions persist.

Recent data from Nansen shows that Solana’s total value locked (TVL) has decreased by 20% so far this month. Additionally, network fees have fallen by 16%, and the number of active addresses has shrunk by 6% over the past week. This weakening demand is further reflected in Solana ETF activity, with a net outflow of $8.2 million recorded on November 27—the first such outflow since these products launched. In comparison, Bitcoin and Ethereum ETFs experienced billions in redemptions during the same period. Despite this, Solana has attracted $369 million in inflows this month, as investors increasingly seek out its yield-generating potential.

Shifting ETF Trends and Staking Appeal

This divergence in ETF flows highlights a broader transformation in market sentiment. Bohdan Opryshko, co-founder of Everstake, notes that both institutional and individual investors are now drawn to Solana’s native staking rewards, which offer annual yields between 5% and 7%—a benefit not available with Bitcoin ETFs and only partially present in Ethereum products. As a result, the amount of SOL staked has reached 407 million tokens, representing 67% of the circulating supply. However, despite this strong interest in staking, Solana’s price has not shown sustained strength, with derivatives trading remaining muted and network fees stagnating.

Security Incidents and Market Volatility

Recent security events have added further uncertainty. On November 27, a hack targeting a Solana hot wallet on the Upbit exchange led to a $36 million loss, prompting the platform to restrict liquidity and intensifying selling pressure. Upbit’s subsequent suspension of SOL deposits and withdrawals for maintenance removed a significant source of liquidity, contributing to heightened short-term volatility. According to CoinDesk, Solana’s price dropped by 4.9% to $153 during the incident, breaking through key support levels even as institutional inflows totaled $336 million.

Outlook: Navigating Uncertainty

Looking forward, Solana’s future trajectory will depend on its ability to overcome these technical and structural obstacles. A recovery above $150 could challenge the upper boundary of the bear flag pattern, while a decisive move below $100 would confirm a deeper correction. Investors are also monitoring shifts in capital allocation, as the growing focus on yield-generating assets could redefine Solana’s position within the broader cryptocurrency market. For now, the balance between staking demand, network performance, and external risks will play a pivotal role in shaping Solana’s price direction.