Will Solana Price Surge After Launch of First Spot ETF?
Solana ETF Launch Sparks Temporary Price Surge Amid Investor Caution
Solana’s Price Movement Following ETF Announcement
Solana (SOL) saw a brief increase in value after the announcement of the first-ever Solana ETF with staking features, set to debut on July 2, 2025. The cryptocurrency climbed nearly 6%, reaching an intraday peak of $158.30 before settling around $152.60. Despite this pullback, SOL remains approximately 44% higher than its lowest point this year, boasting a market capitalization that surpasses $81.6 billion.
Investor Sentiment and ETF Expectations
The excitement surrounding the upcoming REX-Osprey SOL + Staking ETF, which will be the first in the U.S. to provide both on-chain staking rewards and exposure to the spot price, initially fueled the rally. This launch represents a significant shift from previous crypto ETFs that typically excluded staking due to regulatory hurdles. However, as the initial enthusiasm waned, investors began to express concerns regarding the ETF’s potential success.
A significant factor contributing to this skepticism is the relatively modest size of Grayscale’s Solana Trust (GSOL), which has been operational for over 43 months but manages only about $75 million in assets. This is a stark contrast to Grayscale’s Ethereum Trust (ETHE), which had accumulated $10 billion in assets just prior to the launch of the spot Ethereum ETF in July 2024.
Market Dynamics and Derivatives Data
Traders are displaying increasing uncertainty, as evidenced by derivatives data indicating a decline in momentum for Solana, the sixth-largest cryptocurrency by market capitalization. The perpetual futures market on Hyperliquid shows a cautious approach among traders; while long positions slightly outnumber short positions, the latter are currently more profitable. Shorts have gained over $6.71 million, while longs are down by more than $707,000.
This situation suggests that many traders who entered long positions during the ETF hype are now facing losses, which reinforces a cautious outlook for the near term.
Declining On-Chain Activity and Revenue
Additionally, the market capitalization of stablecoins on the Solana network has decreased from $13 billion in April to approximately $10.5 billion, reflecting a significant drop in on-chain liquidity and a reduced demand for transactions within the ecosystem. Despite the recent buzz around Solana memecoins, the network’s revenue has plummeted by over 90% since January, further complicating its performance outlook.
Technical Analysis of Solana’s Price Trends
Analyzing the 1-day chart for SOL against USDT reveals that the cryptocurrency is retracing towards a descending trendline it previously broke, which was instrumental in triggering the recent rally. A fall below this trendline could indicate a reversal in trend and reignite bearish momentum.
Moreover, SOL’s price has dipped below the 50-day simple moving average, a commonly recognized support level, signaling a loss of short-term strength and contributing to a bearish technical outlook. The Relative Strength Index (RSI), which initially rose to 55 following the ETF announcement, has since retreated to 51, indicating that the initial buying pressure has diminished.
Given these technical indicators, SOL may be poised to test support at $143.10, aligning with the 23.6% Fibonacci retracement level. A decisive break below this threshold could pave the way for further declines, with the next significant support level at $126.48, the local low from the previous month.
Potential Selling Pressure from Unstaking
A bearish factor for SOL investors is the impending unstaking of over $585 million worth of SOL within the next two months, which could amplify selling pressure and negatively impact price performance.
Nevertheless, in a market where perception often trumps fundamentals, strong initial flows into the REX-Osprey SOL + Staking ETF could potentially counteract technical weaknesses and stimulate renewed buying interest.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
