Reason: The Meme market is not doing well and selling pressure is increasing. The Bankless analysis team expects that as the Meme coin hype further subsides, SOL's subsequent performance will be worse than ETH.

Despite SOL’s astounding performance between October 2023 and March 2024, with prices subsequently topping out at $200, the ecosystem’s novelty appears to have peaked, with key on-chain metrics (including daily active addresses and DEX volume) stagnating throughout June.
Solana has seized the opportunity of Meme coin issuance in this cycle with its two characteristics of low fees and unified global state, but Meme coins have performed poorly in recent weeks.

Solana's top native meme coins WIF and BONK have fallen more than 50% from their May highs, while other meme coins have performed even worse. Previously popular celebrity meme coins are mostly close to zero. Although some believe that the fading meme craze indicates that Solana is moving healthily towards mass adoption, as Solana users become increasingly aware of the limited profits from on-chain meme coins, they may consider cashing out, leading to a deterioration in Solana's fundamentals and increased selling pressure on SOL.

On June 28, Coinbase Derivatives, as a designated contract market (DCM) registered with the Commodity Futures Trading Commission (CFTC), submitted certification documents to its regulator to list SHIB, LINK, AVAX, XLM and DOT futures.

While the recently filed spot SOL ETF has fueled hopes that Solana will be the next crypto asset to be offered to traditional finance, the SEC’s insistence in multiple lawsuits against cryptocurrency exchanges that SOL is a security, coupled with the lack of a regulated futures market, makes its chances of approval slim.

Compared to SOL, AVAX has not yet been designated as a security by the SEC; future CME futures approval clears the way for spot AVAX ETF approval, just like BTC and ETH. The Bankless analysis team analyzes the next ETF to look at SHIB, LINK, AVAX, XLM and DOT approval narratives.