The Launch of Solana ETFs: Why Is SOL Still Below $200?
Despite the recent launch of Solana ETFs, SOL fails to break the $200 barrier. Investors remain puzzled while analysts reflect on possible price movements.
Key Points:
- Solana’s price remains under $200 despite impressive daily trading volumes in ETFs.
- Recent analysis suggests SOL’s trading pattern may reflect Ethereum’s performance after its ETF launches.
Investors in Solana (SOL) have shown optimism leading up to the approval of ETFs, setting price expectations between $300 and $1,000. Now that the ETFs are operational, the Solana price remains stagnated below the $200 mark. Were traders quick to sell off their positions?
Data has indicated significant buying interest for SOL in futures and spot markets throughout September, particularly ahead of the SEC’s Oct. 10 deadline for ETF approvals, following the successes of Bitcoin and Ethereum ETFs. However, the recent US government shutdown introduced uncertainty regarding this deadline, contributing to a considerable sell-off in the total crypto market, which briefly dropped SOL to as low as $147 on some exchanges.
As of this week, two new ETFs are trading for Solana. Grayscale launched its staking-enabled Solana spot ETF (GSOL), while the Bitwise Solana Staking ETF (BSOL) debuted with considerable activity; it launched with $222 million in assets and recorded $72 million in trading volume on its second day.
Despite the early enthusiasm for the Solana ETF’s approval, which analysts predicted would drive prices to between $300 and $600, SOL is currently trading well under $200.
When questioned about the low trading price, Hyblock analysts remarked:
“BTC’s ETF launch and BTC price also had a similar relationship on launch. BTC price trended flat and down (around -5%) despite growing inflows. Eventually, inflows spiked, marking the bottom for BTC price. The SOL ETF may be going through a similar cycle as initial excitement wanes.”
They further noted that the current timing around the FOMC meeting complicates matters, as many investors, especially institutions likely to purchase via ETFs, may be de-risking.
Current market data suggests that sellers dominate SOL’s market activity, indicating support levels between $188 and $185 and resistance at $204 and $207.
This article does not provide financial advice. All investments carry risk, and individuals should perform their own research prior to investing.
