Solana (SOL) has taken a hit amid a broader market sell-off, sliding 13% over the past week and losing 3.16% in the last 24 hours. The price decrease has reversed some of SOL’s recent gains, sparking speculation on what’s next for the sixth-largest cryptocurrency by market cap.
SOL’s decline comes as the broader cryptocurrency market faces renewed selling pressure, with Bitcoin and other major cryptocurrencies also experiencing declines. In the last 24 hours, crypto derivatives traders have suffered $270 million in crypto liquidations, with leverage longs accounting for $161 million.
Since reaching a low of $126 on March 29, Solana has generally remained between $122 and $130, with tiny increases of roughly 1% on two occasions.
The launch of the Solana futures ETF in late March slightly boosted SOL prices, but the gains have since been negated due to the market’s lackluster performance.
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Volatility Shares LLC launched two exchange-traded funds (ETFs) tracking Solana futures: SOLZ for standard exposure and SOLT for leveraged exposure. The ETFs, the first to track Solana futures, come as issuers await SEC decisions on spot Solana ETFs, which analysts believe have a 75% probability of approval by the end of the year. Several issuers, including Grayscale, Franklin Templeton and VanEck, have submitted paperwork to launch a spot Solana ETF, which has yet to be evaluated by the SEC.
According to a March 31 update shared by Bloomberg ETF analyst Eric Balchunas, “The new Solana futures ETF hasn’t done much, a million in volume first few days is decent for normal ETF but nothing vs btc, about 80x less than BITO’s first few days or IBIT’s.”
What comes next?
At the time of writing, SOL was down 3.16% in the last 24 hours to $125.58. In a positive move for the markets, cryptocurrency exchange-traded products (ETPs) had moderate inflows of $226 million last week, CoinShares announced on March 31; Solana received inflows of $7.8 million.
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As Solana prices consolidate, the first indication of strength will be a break and close over $133. This paves the way for a rally to the 50-day SMA around $148, which may again function as a strong resistance.
However, if buyers break through the resistance, SOL might rise above $180. If bears want to strengthen their position, they must lower the price below the $110-$120 support zone. If they succeed, SOL may begin the second leg of its downward slide toward $80.