Solana experienced a notable rise from May 15-22, followed by a visible decline, causing investor concern. This stagnation suggests potential price movement in either direction in the coming hours due to increased influence from both bulls and bears. Additionally, Solana reached a peak performance level of $187.39 in March but subsequently pulled back.
Why is Solana’s Price Dropping?
In Solana’s price analysis, a decline occurred following rumors of ETH’s ETF approval. Bloomberg analysts previously raised the ETF approval chance from 25% to 75% based on SEC news, leading to Solana’s price dropping to $163.38.
Following this period, SOL’s price rebounded and, as of writing, is trading at $168.42 after a 1% rise. During this time, SOL’s market cap rose to $75 billion, while the 24-hour trading volume fell over 50% to $2.5 billion.
Ethereum ETF approval led to developments among Solana PoS validators. Between May 20-24, a staking frenzy caused the unstaking of 3.5 million Solana tokens. These unstaked SOLs are currently valued at over $594 billion, with the remaining staked SOLs limited to 365.3 million.
Historically, such a decrease in staking levels has led to temporary instabilities in Proof Of Stake networks.
What’s Next for Solana?
Solana appears to have entered a correction phase following an overbought period earlier this week. The Ethereum ETF approval led to selling pressure on Solana, causing a price drop.
However, Solana’s price has been rising since yesterday. This rise may become more notable once the uncertainty surrounding the Ethereum ETF is fully resolved.
Meanwhile, crypto whales and institutional investors are commenting on a potential Solana ETF, considering its demand and status as one of the largest cryptocurrencies following Bitcoin and Ethereum.
Analysts suggest Solana may experience a pullback before potentially rising to $216 in the future.
