Solana’s price has dropped to $170 after failing to break through $200, facing increased selling pressure and mixed bullish indicators.
Following a strong rally from May 15 to 22, Solana has experienced significant declines recently, with both bullish and bearish factors influencing its chart. The coming hours are critical for Solana as its price could move in either direction, highlighting a pivotal moment for investors.
Solana Faces Instability Following Ethereum ETF Approval Rumors
After rumors circulated about the potential approval of an Ethereum ETF, Solana’s charts began to show signs of decline. Bloomberg analysts had hinted at a 75% chance of the ETF approval, which materialized shortly after. This news drove Solana’s price down to a low of $163.38. Since then, the price has recovered slightly and is currently trading at $169.70, with a market cap of $76.26 billion. However, trading volume has decreased significantly, down by 56% from previous levels.
In response to the Ethereum ETF approval, Solana’s Proof of Stake (PoS) validators initiated an un-staking spree, resulting in the unstaking of 3.5 million Solana tokens between May 20 and 24. These tokens are now valued at over $594 million, while the remaining staked SOLs total 365.3 million.
Historically, such a substantial reduction in staking can introduce temporary instability to PoS networks like Solana.
Solana Faces Selling Pressure Amid Ethereum ETF Impact
Solana is currently experiencing a correction phase after encountering overbought conditions earlier this week, exacerbated by the Ethereum ETF news triggering selling pressure. Despite this, Solana’s price has begun to recover, showing a 2.5% increase in recent trading sessions. Market sentiment suggests potential further gains as the hype around the Ethereum ETF settles.
The discussion around a potential Solana ETF has already started among crypto leaders and companies, underscoring its significance as one of the largest cryptocurrencies by market demand after Bitcoin and Ethereum. However, Ethereum’s dominance continues to influence Solana’s price dynamics, prompting investors to cautiously navigate market movements to maximize profits amid uncertainty.
Analysts remain optimistic about Solana’s prospects, projecting a potential price retracement to target $216 in the near term. Favorable technical indicators, such as the Moving Average Convergence Divergence (MACD), currently support this bullish outlook.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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