Solana Faces Strong Bearish Resistance: What’s Next for SOL Price?

Solana Price Decline Following SEC’s Approval of Spot Ethereum ETFs

Solana price has been declining steeply following the SEC’s approval of spot Ethereum ETFs. For example, the SOL/ETH pair, which is closely monitored, has dropped by 16.8% since May 17 following the U.S. Securities and Exchange Commission’s (SEC) request for Ether ETF applicants to revise their 19b-4 filings. Additionally, there’s a decline in activity in the SOL ecosystem, suggesting further bearish pressure on the edge.

Analysts Expect SOL ETF By 2025

Solana might be losing its momentum to Ethereum following SEC’s approval of spot ETH ETF. However, analysts believe that Solana is not far from having its own ETF. Geoffrey Kendrick, an analyst at Standard Chartered, predicts that SOL and XRP ETFs could receive approval by 2025. Kendrick suggests that the recent approval of the ETH ETF implies that Ether and altcoins may not be classified as securities.

Analysts from The Birb Nest have observed that discussions around a Solana ETF are surging on crypto Twitter and in media circles, indicating that it’s likely to happen.

Decline in Solana Ecosystem Activity

The total value locked (TVL) within the Solana ecosystem experienced a notable decline in May. As of May 23, there were 27.48 million SOL locked, down from the monthly peak of 29.4 million SOL. This decline in Solana’s TVL was particularly sharp after May 20, following reports on the potential approval of spot Ether ETFs. On that date, the TVL was recorded at 28.3 million SOL, suggesting that the news about the Ether ETFs might have triggered the withdrawals from the Solana ecosystem.

Since the Ethereum ETF approval on May 20, Solana node validators started rapidly withdrawing funds. Initially holding 368.8 million SOL in staking contracts, they withdrew 3.5 million SOL by May 24, reducing the active staking to 365.3 million SOL. With Solana’s current price at $167, these unstaked SOL are valued at approximately $580 million. Such significant withdrawals from a Proof-of-Stake (PoS) network generally lead to short-term price declines.

What’s Next For SOL Price?

Solana price failed to break above $190 as sellers strongly defended a surge above that level, resulting in a steep decline below immediate Fib channels. SOL price dropped below its EMA trend lines too; however, buyers defended further drops below $160. As of writing, SOL price trades at $166, declining over 4% in the last 24 hours.

SOL price is struggling to surpass the EMA20 trend line, indicating continued bearish pressure at higher levels. The declining EMA trend lines and the RSI level heading toward the oversold region suggest a rising dominance in bearish positions.

Should buyers push past the descending resistance line, the SOL/USDT pair might aim to retest the significant resistance at $192. A break above this level might send the SOL price toward $210.