Solana (SOL) saw a significant price drop of 10% on Thursday, despite a bold move by DeFi Development Corporation (DFDV) to expand its investment in the cryptocurrency. The Nasdaq-listed firm reveal a new equity line of credit (ELOC) agreement worth up to $5 billion with RK Capital Management, aiming to grow its SOL treasury. However, the reveal failed to spark investor optimism as broader market conditions weighed on prices.

Equity Line Targets Strategic SOL Accumulation

According to the company’s statement, the $5 billion equity line gives DeFi Dev Corp the flexibility to issue and sell shares gradually, rather than through a fixed-price equity deal. This strategic financing method allows the company to raise capital in favorable market conditions and allocate those funds toward Solana accumulation.

“Unlike traditional equity offerings, this equity line enables us to raise capital on our own terms and schedule,” the company said in a press release.

The equity line agreement is contingent on filing a resale registration statement with the U.S. Securities and Exchange Commission (SEC). This filing would allow the company to sell shares to the public as needed. It marks a significant shift from the company’s earlier plan, which involved a $1 billion capital raise under a Form S-3 filing. That filing was later withdrawn after the SEC deemed the company ineligible due to missing internal financial control reports.

dfdvSOL Integrated Into RateX Platform

In addition to the equity funding plan, DeFi Dev Corp revealed further integration of its Solana-based liquid staking token (LST), dfdvSOL. The token is now part of the RateX ecosystem—a Solana-built yield trading platform. This move enhances the utility of dfdvSOL by providing access to yield farming opportunities, fixed-income products, and greater liquidity.

This integration is expected to support DeFi Dev Corp’s broader mission of making institutional-grade tools accessible to the Solana ecosystem while building long-term yield strategies around the token.

As of now, DeFi Dev Corp holds approximately 609,190 SOL tokens, valued at around $93 million. The firm has acquired these tokens through 11 separate transactions since April, showing its long-term confidence in Solana’s potential.

Market Reaction: Solana Faces Technical Resistance

Despite these developments, Solana’s price trajectory did not reflect the positive news. After initially approaching the upper boundary of a descending price channel, SOL faced strong resistance and declined below its 50-day Simple Moving Average (SMA). The drop brought the price down to test the critical $142 support level, which aligns with the 100-day SMA.

Analysts suggest that if this level fails to hold, Solana could face additional losses, potentially dropping toward the lower limit of the descending channel. This technical outlook comes in tandem with general weakness across the cryptocurrency market. Bitcoin (BTC) also experienced a drop, and many altcoins reported double-digit declines.

This broader market downturn, rather than the specifics of DeFi Dev Corp’s investment strategy, appears to be the main driver behind SOL’s sharp decline. Even with positive corporate moves, traders remain cautious amid current bearish momentum.

Strategic Moves, But Investor Sentiment Lags

The timing of DeFi Dev Corp’s reveal may not have been ideal from a market sentiment perspective. While the plan to raise capital for SOL acquisition shows confidence in Solana’s long-term value, the market’s reaction indicates short-term concerns remain dominant.

The combination of broader crypto market losses, technical resistance, and the SEC’s earlier rejection of the S-3 filing may have contributed to the underwhelming response from investors.

Nevertheless, institutional moves like these highlight a growing trend of crypto firms and listed companies creating digital asset treasuries. The flexibility of equity lines like this one allows companies to steadily increase their holdings without large upfront commitments.

Outlook for Solana

Going forward, Solana’s near-term performance will depend heavily on the market’s ability to recover from its recent pullback. If support at $142 holds and buying volume increases, SOL could attempt to reclaim previous highs. However, a breakdown below key support may invite further selling.

For long-term investors, the move by DeFi Dev Corp suggests a belief in Solana’s staying power and a maturing ecosystem supported by staking, liquid tokens, and institutional interest.

As always, caution is advised, especially as macroeconomic uncertainty and regulatory developments continue to shape the crypto landscape.