Key Takeaways
- •SOL's price remains below $200 despite impressive daily trading volumes for newly launched Solana ETFs.
- •Analysts suggest SOL's price behavior might mirror Ethereum's initial post-ETF launch performance, characterized by a lag.
Market Expectations vs. Reality
Traders and analysts exhibited strong optimism for SOL throughout September, anticipating a significant price rally. This sentiment was fueled by the US Securities and Exchange Commission’s (SEC) October 10 deadline for a segment of spot ETF approvals and the successful performance of Bitcoin (BTC) and Ether (ETH) ETFs. Data indicated a substantial increase in investor interest in SOL futures and spot holdings leading up to this period. However, the US government shutdown introduced uncertainty regarding the deadline, and a broad market liquidation event on October 10 caused SOL's price to drop as low as $147 on some cryptocurrency exchanges.
The market now sees two new Solana ETFs trading this week. Grayscale Investments launched its staking-enabled Solana spot ETF, GSOL, on Wednesday. The day prior, on Tuesday, the Bitwise Solana Staking ETF, BSOL, commenced trading. Reports indicate that BSOL launched with $222 million in assets and concluded its second day with $72 million in trading volume.
Prior to the US government shutdown and the October 10 sell-off, analysts had projected that a Solana ETF approval and successful launch would propel SOL's price into the $300 to $600 range. Currently, however, the altcoin is trading below $200.
Analyst Perspectives on Current Price Action
When questioned about the current situation and whether the SOL trade has evolved into a "sell-the-news" scenario, Hyblock analysts provided insight: "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, the floodgates opened and inflows really spiked, which marked the bottom on BTC price. The SOL ETF may be going through a similar cycle as the initial excitement fades away."
The analysts further commented on external factors influencing the market: "The FOMC timing doesn’t help as many participants (especially institutions who would buy via ETF) are likely de-risking ahead of the meeting. We don’t view it as a red flag; it’s expected behavior for high-profile events such as these."
Current market data suggests sellers are exerting pressure on SOL's price. The order book indicates support levels between $188 and $185, with resistance observed at $204 and $207.