Traders are increasingly betting against Solana 's native SOL coin as negative sentiment grows due to recent memecoin controversies within the network.

According to CoinTelegraph, data from Coinalyze shows a significant shift in market sentiment, with the ratio of long to short SOL positions on cryptocurrency futures exchanges falling from 4 to 2.5 on February 17, signaling a marketwide move towards bearishness on SOL.

A cryptocurrency influencer known as Tyler Durden highlighted on February 17 that the ratio of short to long positions on Binance’s perpetual futures platform had increased to 4-to-1, suggesting a dominance of bearish bets. Perpetual futures, commonly referred to as "perps," are derivatives that allow traders to buy or sell an asset at a future date without an expiration.

The price of SOL has dropped nearly 6% as of the most recent data from CoinGecko. This downturn coincides with the rise and subsequent fall of memecoins such as Bonk and Dogwifhat, which saw billions of dollars flow into the Solana ecosystem and reached market capitalizations over $4 billion before declining in December and January.

Despite a 213% increase in application revenues on Solana in the fourth quarter of 2024, driven largely by memecoin speculation, insider selling and significant losses for retail investors are now negatively impacting sentiment. The dramatic loss of market capitalization for Libra (LIBRA) on February 14, which saw a decline of $4.4 billion within hours of its launch, has also contributed to the declining confidence in Solana's memecoin ecosystem.

Additionally, traders have faced substantial losses since January on Official Trump (TRUMP), the official memecoin of US President Donald Trump, with approximately $2 billion lost across 800,000 wallets. The fully diluted value of TRUMP has plummeted by roughly 75% from over $70 billion to around $17 billion as of February 17.

Despite these challenges, Solana continues to outperform Ethereum in terms of revenue generation, even amid the slowdown in memecoin trading, as reported by data from DefiLlama.