Solana Surges 6% on ETF News, Retreats Amid Skepticism

Solana (SOL) experienced a brief surge following the announcement that the first-ever Solana ETF with staking capabilities is set to launch on July 2, 2025. The token rose nearly 6% to an intraday high of $158.30 before retreating to around $152.60. Despite this pullback, SOL remains approximately 44% above its year-to-date low, with a market capitalization exceeding $81.6 billion.

The rally was fueled by investor excitement surrounding the upcoming launch of the REX-Osprey SOL + Staking ETF, the first U.S. ETF to offer on-chain staking rewards alongside spot price exposure. This marks a significant shift from previous crypto ETFs, which have largely excluded staking features due to regulatory and structural constraints.

However, the initial enthusiasm quickly waned as investors began to reassess the potential success of the new Solana ETF. A key factor contributing to this skepticism is the relatively small size of Grayscale’s Solana Trust (GSOL), which has been operational for over 43 months but manages only about $75 million in assets. This is in stark contrast to Grayscale’s Ethereum Trust (ETHE), which had amassed $10 billion in assets just a month before the spot Ethereum ETF launched in July 2024.

Traders are also showing signs of uncertainty, with derivatives data indicating weakening momentum for the sixth-largest crypto asset by market cap. Solana’s perpetual futures market on Hyperliquid reveals a cautious stance among traders, with long positions slightly outweighing shorts in volume. However, shorts are currently up by over $6.71 million, while longs are collectively down more than $707,000. This disparity suggests that many longs bought in during the ETF hype and are now underwater, reinforcing a cautious near-term outlook.

Additionally, the market cap of stablecoins on the Solana network has fallen from $13 billion in April to around $10.5 billion, indicating a notable decline in on-chain liquidity and reduced demand for transactional activity within the ecosystem. Despite the recent hype surrounding Solana memecoins, the network’s revenue has declined by over 90% since January. These factors could continue to weigh on Solana’s performance despite the ETF news.

On the 1-day/USDT chart, Solana (SOL) is pulling back toward the descending trendline it broke earlier, the same level that sparked today’s rally. If it falls back below this line, it could signal a trend reversal and bring back bearish momentum. Price action has also slipped below the 50-day simple moving average, a commonly observed dynamic support level. This breakdown signals fading short-term strength and adds to the bearish technical outlook.

The Relative Strength Index, which initially rose to 55 after the ETF news broke, has fallen back to 51, indicating that the initial buying pressure has faded. Given these technical signals, SOL appears poised to retest support at $143.10, which aligns with the 23.6% Fibonacci retracement level. A decisive break below this level could open the path toward deeper downside, with the next key support resting at $126.48, its local low from last month.

A bearish overhang for SOL investors is that over $585 million worth of SOL will be unstaked in the next two months, which could potentially increase selling pressure and weigh further on price performance. However, in a market where perception often outweighs fundamentals, strong day-one flows into the REX-Osprey SOL + Staking ETF could override technical weakness and drive renewed accumulation.