Solana Sentiment Weakens After Q1 2025 Network Outage and 67% Drop from Cycle Peak

Solana (SOL) investor sentiment has deteriorated in early 2025 following a roughly 67% decline from its prior cycle peak and operational setbacks including a January security update and a major February outage that halted block production for several hours, blockchain analytics firm Santiment reports. Technical indicators show the Relative Strength Index struggling to hold above 50, while negative funding rates and heavy short positioning in SOL perpetual contracts on major exchanges reflect sustained selling pressure. Santiment notes that broader market corrections and liquidity rotation into Bitcoin, Ethereum and stablecoins have driven capital outflows from the Solana ecosystem, with longer-term recovery dependent on infrastructure upgrades such as Firedancer, diversified use cases and consistent network uptime.