Important takeouts:
Sol struggles to maintain $200 as on-chain activity becomes weaker and remains restrained by leveraging demand.
Spot ETF approval and institutional support could lift SOL, but the current basics suggest the possibility of a limited rally.
Solana’s native token (SOL) has repeatedly failed to hold levels above $200 over the past six weeks, making traders wonder what limit the benefits. The fact that competitors Ether (ETH) and BNB (BNB) have recently reached new all-time highs have raised concerns.
Potential approval of the Solana Spot Exchange-Traded Fund (ETF) in the US could push tokens over $250, combined with the company’s signaling intent to add SOL to the company’s reserve strategy. However, three conditions must be met before sustainable gatherings take hold.
Investors are being careful as Onchain and Futures data is slower
For Sol Buyers to regain confidence, their on-chain activities in Solana must be enhanced. Network prices fell 17% compared to the previous week, but the number of transactions fell 10%. Meanwhile, BNB chain prices rose 6%, but transaction levels remained flat. Ethereum’s Layer-2 activity also showed growth, with base transactions increasing by 14% and arbitrum increasing by 20%.
Relatively speaking, Solana’s fee levels remain significant as the network’s $12.5 billion total is locked (TVL) compared to Ethereum’s nearly $100 billion. Still, Solana’s chain revenues fell 91% from its peak in January. This is a recession coincided with the launch of the official Trump (Trump) tokens and the broader memocoin frenzy.
The lack of demand for bullish leverage on Sol futures adds to cautionary sentiment.
Under neutral conditions, permanent futures typically show an annual premium of 8% to 14%, reflecting capital costs and counterparty risk. The current 10% rate shows balanced demand, which is not inherently negative, but is slightly concerning given that Sol’s prices have already increased 39% over the past two months.
The long ratio of Binance’s top traders has shifted sharply towards a bearish position. This indicator provides a broader measure of sentiment as it incorporates futures, margins and spot markets.
Demand for bullish SOL exposure in Binance rose monthly last Saturday, but has since dropped significantly. Derivative data shows that whales and market makers are not aggressively bearish, but remain cautious about destroying Sol over $200.
Institutional backing and SEC action remains a critical catalyst
Sol’s prices show little response to reports that Galaxy Digital, Multicoin Capital and Jump Crypto are working to raise $1 billion for a Solana-centric digital asset financing company. Bloomberg added that the Solana Foundation supports the initiative, but the news has failed to spark momentum.
Related: Solana Devs charged $5K for a single query via Google Cloud’s BigQuery
The ultimate obstacle to Sol’s path to $250 lies in a pending decision from the Securities and Exchange Commission (SEC) regarding multiple Solana Spot ETF filings. Bloomberg analyst Eric Baltunas estimates approval odds of more than 90%, although the SEC’s final deadline will drop in mid-October.
SOL could exceed $200 before these catalysts were generated, but the potential for sustainable gatherings remains low given that ONCHAIN activity is weak, limited demand for bull leverage, and the uncertainty about the outcome of ETFs.
