Solana’s native token, SOL, has had a tough time staying above $200 for the past six weeks, leaving traders scratching their heads. SOL reached the $200 level once more, but will it remain there or decline? Meanwhile, its rivals, Ether and BNB have been enjoying new all-time highs, making the lack of movement even more noticeable.
There's hope for a SOL price boost, especially with the potential approval of a Solana spot exchange-traded fund (ETF) in the US and companies eyeing SOL for their corporate reserves. But there are three key conditions that need to be met for a real rally.
On-Chain Data Doesn’t Look So Hot for SOL
For SOL to regain its mojo, Solana’s on-chain activity needs to step up. Network fees have dropped 15% compared to the previous week, and transactions are down 9%. On the other hand, BNB Chain saw fees rise by 11%, and Ethereum’s Layer-2 activity is looking strong, with Base up 15% and Arbitrum gaining 0.9%.
Solana's fees still stand out compared to Ethereum, with Solana boasting a $12.5 billion total value locked (TVL) compared to Ethereum’s nearly $100 billion. But let’s not forget, Solana’s chain revenue has plummeted 91% since January, largely due to the memecoin madness and the launch of the Trump token.
Futures Data Keeps Investors on Edge
When it comes to futures, SOL isn’t seeing the bullish leverage that would spark a major rally. In normal market conditions, perpetual futures usually show an annualized premium between 8% and 14%, but right now, it’s sitting at 10%. While not a huge red flag, it’s a bit concerning considering SOL has already jumped 39% over the past two months.
Binance’s long-to-short ratio has shifted toward bearish positioning, signaling that while whales and market makers aren’t super bearish, they’re not rushing in to buy either.
Institutional Interest and SEC’s Decision Are Key
Despite reports that Galaxy Digital, Multicoin Capital, and Jump Crypto are raising $1 billion for a Solana-focused treasury company, the news didn’t move the needle for SOL. Even the backing of the Solana Foundation couldn’t spark any significant momentum.
The real kicker for SOL’s future lies in the SEC’s decision on multiple Solana spot ETF filings, with approval odds estimated at 90% by Bloomberg analyst Eric Balchunas. The deadline? Mid-October. While SOL might still inch above $200 before then, a sustainable rally is unlikely with the current weak on-chain activity, cautious leverage demand, and uncertainty surrounding the ETF approval.
Roman Zaika
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