Open interest in Solana (SOL) futures surged to a record high as the token rallied back to $217, its strongest level since February, even as Solana’s application revenue suffered a sharp decline.

The broader crypto market was weaker, with the CoinDesk 20 Index down 3.6% over the past 24 hours, as traders positioned defensively ahead of Friday’s release of the U.S. core PCE inflation report. The measure, closely watched by the Federal Reserve, could help determine the trajectory of interest-rate cuts. Analysts at Bitunix warned that an upside surprise may push the Fed toward a “one-and-done” approach following a likely September cut.

“Watch whether Bitcoin can flip $114.5K into support, or if a retest of $107.6K holds to confirm resilience,” Bitunix told CoinDesk.

Derivatives Positioning

While futures open interest in most major tokens fell, SOL was the clear outlier. Its OI climbed to a record 63.84 million contracts, underscoring bullish positioning. By contrast, OI in CME Bitcoin futures dropped to 135.72K BTC, the lowest since April, while Ether futures remained near record highs of 2.10 million ETH, signaling investor preference for ETH over BTC.

Funding rates also pointed to shifts in sentiment: ETH, TRX, and BNB flipped slightly negative, reflecting bearish bias, while most other majors held steady. On Deribit, downside hedging strengthened, with BTC puts trading at a five-volatility premium over calls across short tenors, while ETH options displayed similar dynamics. Paradigm block flows highlighted call selling and put rolling in BTC and ETH, though Wintermute noted interest in December BTC call spreads.

Token Fundamentals: Solana

Despite the rally in SOL’s price and futures, fundamentals showed stress. Messari data revealed Solana’s Q2 application revenue fell 44%, down to $576.4M from $1B in Q1, driven by weaker profitability across top dApps.

• Pump.fun (PUMP) remained the leader with $156.9M, though revenues dropped 44% as memecoin activity cooled.
• Axiom bucked the trend, surging 641% to $126.6M, showing how protocol-specific growth can counter sector-wide weakness.
• Jupiter (JUP) revenue slipped 16% to $66.4M, while Phantom and Photon saw steeper drops of 65% and 72%, respectively.

Even so, Solana’s DeFi total value locked (TVL) climbed 30% in Q2 to $8.6B, and has since topped $11B, making it the largest DeFi network after Ethereum. Kamino Finance led growth with deposits surging after its Kamino Lend V2 launch, while Raydium regained second place from Jupiter, now holding 21% market share.

However, trading volumes reflected a slowdown. Average daily spot DEX activity fell 45% to $2.5B, highlighting the fading memecoin frenzy that drove earlier gains.