Solana News Today: Solana's $200 Hurdle: ETF Approval or Institutional Push Needed

Solana's native token (SOL) has struggled to maintain levels above $200 over the past six weeks amid weak onchain activity and subdued demand for leveraged bullish positions. Competitors such as Ethereum (ETH) and BNB (BNB) have recently achieved new all-time highs, highlighting a growing divergence in market dynamics. Analysts suggest that the approval of a Solana spot exchange-traded fund (ETF) in the United States and institutional support could potentially push the token above $250, though this outcome is contingent on meeting three key conditions [1].

Onchain data reveals a decline in Solana's performance relative to its peers. Network fees fell 17% compared with the prior week, while transactions dropped 10%. In contrast, the BNB Chain saw a 6% increase in fees, and Ethereum’s layer-2 activity grew by 14% on Base and 20% on Arbitrum [1]. Despite a total value locked (TVL) of $12.5 billion, Solana’s chain revenue has dropped 91% from its January peak. This decline has coincided with a surge in memecoin activity, including the launch of the Official Trump (TRUMP) token, which has drawn attention away from institutional-grade blockchain projects [1].

Derivatives data also reflects cautious positioning among traders. The annualized premium for SOL perpetual futures stands at 10%, suggesting balanced demand but raising concerns given the token’s 39% gain in the last two months. Binance’s top-trader long-to-short ratio has shifted sharply toward bearish positioning, indicating a broader hesitancy among traders to assume bullish exposure. Although whale and market-maker activity remains relatively neutral, there is little evidence of aggressive bullish positioning, which is necessary for a sustainable price move above $200 [1].

Institutional backing and the outcome of the U.S. Securities and Exchange Commission (SEC) review of multiple Solana spot ETF filings remain critical catalysts for the token’s price trajectory. A recent initiative led by Galaxy Digital, Multicoin Capital, and Jump Crypto aims to raise $1 billion for a Solana-focused digital asset treasury company, with support from the Solana Foundation. However, this news has not yet translated into price momentum [1]. According to Bloomberg analyst Eric Balchunas, the likelihood of ETF approval is above 90%, but the SEC’s final decision is expected by mid-October. Until this uncertainty is resolved, the market is likely to remain cautious [1].

Comparative analysis with Ethereum further underscores Solana's challenges. While Solana leads in daily active addresses (over 3 million) and transactions (around 100 million daily), Ethereum remains the dominant force in decentralized exchange (DEX) volume, with over $5.5 billion in 24-hour activity compared to Solana’s $3.5 billion [2]. This highlights a key divergence between the two blockchains: Solana's strength in user activity and Ethereum's dominance in liquidity. Analysts suggest that Solana’s ability to convert higher onchain activity into increased DEX share will be a critical factor in determining whether it can break out above $200 [2].

Despite the challenges, several developments could support Solana’s long-term growth. Institutional adoption is growing, with R3’s partnership allowing major banks such as HSBC and Bank of America to leverage Solana’s blockchain for asset tokenization and faster settlement. Additionally, PayPal’s use of Solana for its stablecoin in 2024 highlights the platform’s increasing appeal in the mainstream financial sector. These developments, combined with Solana’s technical advantages—such as its high throughput and low fees—suggest that the blockchain is well-positioned to challenge Ethereum’s dominance in the long run [3].

Source: [1] SOL Could Rally To $250 If Three Key Factors Align (https://cointelegraph.com/news/sol-could-rally-to-250-if-three-key-factors-align) [2] Solana vs Ethereum: Which Is Poised for a Breakout This ... (https://investinghaven.com/crypto-blockchain/coins/solana-vs-ethereum-network-activity-and-breakout-potential-this-week/) [3] Ethereum vs. Solana: Comparative Report (https://messari.io/compare/ethereum-vs-solana)