Solana price held steady at $200 on Tuesday as investors awaited the upcoming launch of the SOL ETF. The token was trading at $200, up by 16% from its lowest level this month. So, can it go parabolic once the ETFs launch?
SOL ETF to Launch This Week
Eric Balchunas, the Senior ETF analyst at Bloomberg, said that Bitwise will launch its Solana ETF on Tuesday, while Grayscale will convert the Solana Trust (GSOL) into an ETF on Wednesday.
If this is correct, it means the SEC will likely approve other crypto ETFs as soon as this week, which may lead to increased investor demand.
Analysts believe that a Solana ETF would be highly successful because it is the second-biggest competitor to Ethereum, which has already attracted over $14 billion in assets since July last year.
Still, while these ETFs will likely generate hype, the reality is that a better Solana ETF has existed since July this year, when REX-Osprey launched the staking ETF.
This fund, which has attracted over $404 million in assets, is better because of its staking feature. It invests all assets in staking and then distributes the staking rewards to its investors.
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This is notable, as Solana offers a staking yield of about 7.5%, higher than that of US government bonds. As such, while this fund has a higher expense ratio of 0.75%, its balance is well covered by the staking return.
There is a likelihood that the Solana price will rally after the ETFs start trading, as investors anticipate more demand from American investors. However, the risk is that this could be a sell-the-news event, as we saw with the launch of the Ethereum ETFs in 2024.
Solana Price Technical Analysis
The daily timeframe chart shows that the Solana price peaked at $253 in September and then plummeted to $169 earlier this month.
SOL price has now bounced back and moved to the important resistance level at $200, which coincides with the 100-day and 200-day Exponential Moving Averages (EMAs). This price also coincides with the Major S/R pivot point of the Murrey Math Lines tool.
Therefore, it is likely that the Solana price will rise and possibly retest the key resistance level at $250 as the ETFs start trading and the Federal Reserve delivers its interest rate cuts. This target is both on a psychological level and also the ultimate resistance of the Murrey Math Lines tool.
A drop below this month’s low of $170 would invalidate the bullish Solana price forecast and signal more downside in the near term.
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