Why Solana plunged 9% just as Wall Street funds circled $2.25 billion

Solana dropped to $186 in the early hours of Aug. 26, erasing 9% despite strong activity across its ecosystem. Data from Binance showed that SOLUSDT saw intraday lows around $185 before recovering toward $188-$189.

SOL rallied from $180 on Aug. 21 to a local peak above $213 on Aug. 25, followed by a swift rejection. Spot volumes rose with the selloff, indicating that the downturn was driven by participation rather than thin liquidity.

The correction contradicts the good news in line for SOL. Pantera Capital is reportedly preparing a $1.25 billion raise to convert a Nasdaq-listed company into a public vehicle designed to accumulate SOL as a treasury asset.

Galaxy Digital, Jump Crypto, and Multicoin Capital are also looking to raise funds to accumulate $1 billion in Solana. The three intend to acquire a public company to create a new digital asset treasury company.

The disconnect between positive developments and falling price can be explained by two factors. First, profit-taking after Solana’s sharp run-up last week created overbought conditions. SOL had gained nearly 15% between Aug. 21 and Aug. 24, outpacing most large-cap tokens.

The move from $180 to above $213 compressed into three trading sessions left traders positioned heavily long, creating a setup where even modest selling pressure triggered cascading liquidations. Second, broader market rotation reduced appetite for high-beta tokens.

This divergence also shows us how the DeFi market absorbs institutional news. Unlike Bitcoin, which reacts swiftly and strongly to news of institutional adoption, altcoins seem much less reactive.

While Pantera’s $1.25 billion raise is significant, capital like that is deployed gradually, and its immediate effect on secondary trading is limited. Similarly, Solana’s expanding footprint in DeFi, NFTs, and real-world assets improves long-term fundamentals but doesn’t offset the technical need for consolidation after a rapid climb.

Short-term traders are more sensitive to liquidity, order book depth, and funding conditions than to venture funding headlines.

This pullback is also consistent with prior Solana price cycles. Strong rallies have historically been followed by 8–12% drawdowns before resuming the trend, particularly when daily spot volume expands as on Aug. 25.

If ecosystem growth continues and larger players allocate gradually, the market may treat the current dip as a reset rather than a reversal.

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