Solana has experienced significant price movements recently, showing a rise from May 15-22, followed by a decline that has concerned investors. The latest trends indicate that Solana’s price could swing in either direction as market forces from both bulls and bears intensify. Notably, Solana achieved a high of $187.39 in March but then pulled back, reflecting the market’s fluctuating nature.
Why Is Solana’s Price Dropping?
The recent drop in Solana’s price is attributed to rumors about the approval of an Ethereum ETF. Bloomberg analysts increased the likelihood of this approval from 25% to 75% based on SEC updates, causing Solana’s price to fall to $163.38. Despite this, Solana rebounded and, at the time of writing, trades at $168.42 after a 1% rise. During this period, Solana’s market cap rose to $75 billion, even though its 24-hour trading volume dropped by over 50% to $2.5 billion.
What’s Next for Solana?
Following the Ethereum ETF approval, changes among Solana PoS validators were observed. Between May 20-24, a significant amount of 3.5 million Solana tokens were unstaked, valued at over $594 billion. This left 365.3 million SOLs staked. Historically, such reductions in staking levels have caused temporary instabilities in Proof Of Stake networks.
Will Solana Recover?
Solana seems to be in a correction phase after an overbought period earlier this week. The ETF approval for Ethereum led to selling pressure on Solana, resulting in a price dip. However, the price of Solana has been on the rise since yesterday, which might continue once uncertainties about the Ethereum ETF are resolved.
Key Takeaways for Investors
- Rumors of Ethereum ETF approval significantly impacted Solana’s price.
- Unstaking of 3.5 million SOL tokens could lead to temporary network instability.
- Market analysts predict a potential rise to $216 for Solana.
- Continued price monitoring and market developments are crucial for investors.
In conclusion, crypto whales and institutional investors continue to speculate about a potential Solana ETF, given its importance in the market. Analysts foresee a possible pullback but remain optimistic about future gains, pointing towards a potential price of $216.