The confirmation of the first Solana ETF with staking functionality, set to launch on July 2, 2025, triggered a brief price rally for Solana (SOL).
According to crypto.news data, SOL surged nearly 6% intraday on Monday, reaching a high of $158.30 before settling around $152.60 at publication time. Despite the pullback, the token remains approximately 44% above its yearly low, with its current market capitalization exceeding $81.6 billion.
The ETF Hype and Subsequent Cooling
SOL's upward momentum stemmed from investor excitement surrounding the upcoming REX-Osprey SOL + Staking ETF. This groundbreaking product will be the first U.S. fund to offer both spot price exposure and on-chain staking rewards—a significant departure from previous cryptocurrency ETFs that typically excluded staking due to regulatory and structural constraints.
However, early enthusiasm quickly waned as investors tempered expectations about the new Solana ETF's potential success.
Key Market Concerns
- Limited Institutional Interest: The Grayscale Solana Trust (GSOL), operational for 43 months, manages only about $75 million in assets—paling in comparison to the $10 billion Grayscale Ethereum Trust (ETHE) held before spot Ethereum ETF approvals in July 2024.
Derivatives Market Signals:
- Hyperliquid's perpetual contracts show cautious positioning, with shorts currently profitable (+$6.71M) while longs face losses (-$707K)
- This suggests many buyers entered during ETF speculation and are now underwater
Network Health Indicators:
- Stablecoin market cap on Solana has declined from $13B in April to $10.5B, indicating reduced on-chain liquidity
- Network revenue has plummeted over 90% since January despite meme coin activity
Technical Analysis: SOL Price Outlook
In the 1D/USDT chart, SOL is retesting a previously broken descending trendline—a critical level that initially triggered today's rally. A confirmed breakdown could signal trend reversal and renewed bearish momentum.
Concerning Technical Signals:
✅ Key Levels to Watch
| Support Level | Resistance Level |
|---|---|
| $143.10 (23.6% Fib) | $158.30 (Recent High) |
| $126.48 (June Low) | 50-day SMA ($154.20) |
✅ Momentum Indicators
- RSI retreated from 55 to 51 post-ETF announcement, showing fading buying pressure
- Price currently trading below the 50-day moving average
👉 Discover how market dynamics could impact SOL's trajectory
Potential Downside Risks
- Upcoming Unlocks: Over $585M worth of SOL will become unstaked in the next two months, potentially increasing sell pressure
- Ecosystem Outflows: Continued decline in stablecoin value may further reduce transaction activity
FAQ: Solana ETF Impact
Q: How does this ETF differ from previous crypto funds?
A: It's the first to combine spot exposure with staking rewards, allowing investors to earn yield while tracking SOL's price.
Q: Why is GSOL's small AUM significant?
A: It suggests limited institutional demand compared to Ethereum, raising questions about potential ETF inflows.
Q: Can the ETF still drive SOL price higher?
A: Strong first-day inflows could override technical weakness, but current derivatives data suggests caution.
👉 Explore staking opportunities in volatile markets
Conclusion: A Cautious Outlook
While the ETF introduction marks a milestone for Solana, multiple headwinds—including weakening technicals, impending token unlocks, and shrinking network activity—may continue to suppress SOL's performance in the near term. Traders should monitor the $143 support level closely, as a breakdown could open the path toward $126. However, in crypto markets where sentiment often overrides fundamentals, unexpectedly strong ETF demand could still shift the narrative.
Disclaimer: This content is for educational purposes only and does not constitute investment advice.
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