Solana Price Faces Downside Risks Despite SOL ETF Inflows
Solana, a leading Layer 1 network, has experienced a significant decline in its price, dropping 38% since its peak in August. Despite this, investors continue to show interest in the recently launched SOL ETFs, with cumulative inflows reaching $342 million. However, technical indicators suggest that the token’s price could crash below $100, sparking concerns among investors.
The sustained decline in Solana’s price has been a trend in the cryptocurrency market, with other tokens such as Ethereum, Avalanche, and XRP also experiencing similar downturns. According to data compiled by SoSoValue, the two spot ETFs saw inflows of $6.78 million on Monday, bringing the total assets of these funds to $600 million. This growth is expected to continue as the SEC considers additional Solana ETFs from companies like VanEck, 21Shares, Franklin Templeton, and Fidelity.
Technical Analysis of Solana Price
The daily time frame chart shows that Solana has been in a strong downtrend for the past few months, with a death cross forming when the 50-day and 200-day weighted moving averages crossed. The Solana price has fallen below the supertrend indicator, a sign that bears remain in control. It also formed an inverted cup-handle pattern with a depth of about 38.2%. Measuring the same distance from the bottom of the cup suggests further downside, possibly to $96, closer to the year-to-date low.
SOL price chart | Source: crypto.news
Solana Ecosystem Performance
Despite the decline in Solana’s price, its ecosystem is performing well, with DEX protocols on its network leading by volume. Data from DeFi Llama shows that these platforms have transacted over $139 billion in volume in the last 30 days, more than BSC’s $102 billion and Ethereum’s $88 billion. DEX protocols like HumidiFi, Meteora, and Raydium are at the forefront of growth, indicating a strong and active ecosystem.
It is common for a cryptocurrency with solid fundamentals to decline, especially when the industry is not doing well. However, the sustained interest in SOL ETFs and the performance of its ecosystem suggest that Solana has a strong foundation for future growth. As the SEC considers additional Solana ETFs, investors will be watching the token’s price closely, hoping for a rebound. For more information, visit https://crypto.news/solana-price-risks-below-100-despite-sol-etf-inflows/
