Solana Battles Key Support at $169 Amid Institutional Push for Liquid Staking ETFs
Jito Labs, a Solana infrastructure provider, has teamed up with well-known asset managers VanEck and Bitwise, as well as the Solana Policy
Quick overview
- Jito Labs has partnered with VanEck, Bitwise, and others to urge the SEC to approve liquid staking for Solana ETPs, which could enhance capital efficiency for institutional investors.
- Liquid staking allows token holders to stake assets while still trading, potentially reducing operational costs and tracking errors for ETP issuers.
- Despite a recent price drop, Solana's network activity has surged, indicating growing interest and competition in the meme coin market.
- Institutional confidence is rising, with significant purchases of SOL suggesting that investors view current prices as an attractive opportunity.
Jito Labs, a Solana infrastructure provider, has teamed up with well-known asset managers VanEck and Bitwise, as well as the Solana Policy Institute and Multicoin Capital Management, to make a concerted plea to the US Securities and Exchange Commission (SEC). The group wants the approval of liquid staking features in Solana exchange-traded products (ETPs). This might make capital use much more efficient for institutional investors.
Liquid staking lets token holders stake their assets and get derivative tokens in return. This lets them keep trading and participating in DeFi without having to wait for the usual “lock-up” time. The stakeholders say that this system would stop forced rebalancing during big creations and redemptions, which might lower ETP issuers’ operating expenses and tracking errors.
The alliance said in their letter to the SEC that “If issuers are forced to limit staking to a set percentage of assets, large creations and redemptions would force rebalancing, which would raise the costs of running the ETP and create the possibility of tracking error.” There are at least nine Solana ETPs that are waiting for government clearance. This news could be very important for the asset’s use by institutions.
Solana Network Activity Surges Despite Price Weakness
Solana SOL/USD is currently trading at $169, which is down more than 6.5% in the past 24 hours. However, the core network fundamentals tell a different story. According to Artemis statistics, Solana’s weekly transaction volumes have grown for six weeks in a row, going from 674.3 million transactions in early June to 816.1 million last week, a huge 21% increase.
The rise in network activity seems to be caused by growing competition in the meme coin generation market, with protocols like LetsBonk.fun contesting Pump.fun’s supremacy. Since its inception in April, LetsBonk.fun has taken almost 60% of the market share in the meme coin generation space. This shows that the ecosystem is still coming up with new ideas and getting people to utilize them.
SOL/USD Technical Analysis Reveals Critical Support Battle
The important $170-$175 support zone is a make-or-break moment for SOL right now. It has been a consistent reaction region for the past two months. The latest drop below an upward expanding wedge pattern has put more pressure on bulls. The asset is also trading below its 20-day simple moving average (SMA-20), which is a technical indicator that shows short-term bearish momentum.
But a number of technical variables point to the possibility of a quick turnaround. CoinAlytix data suggests that there is a lot of short liquidation pressure building between $185 and $190. A 5% price increase could set off a chain reaction of forced buybacks. If bulls can hold on to current support levels, this “liquidation fuel” could help push prices up.
The relative strength index (RSI) has gone below its 14-day moving average, but it hasn’t passed the important mid-line that usually means there is further selling pressure. Also, the $175 level has shown great strength, with SOL bouncing back strongly several times when it gets close to this area.
Institutional Confidence Signals Bullish Undercurrent
Even though the technology isn’t working well right now, institutional action shows that people are becoming more confident in Solana’s long-term future. DeFi Dev Corp recently bought more than 181,000 SOL, boosting its total holdings to more than $218 million. The average price they paid for the SOL was $155.33. This method of buying more when prices are low usually means that smart investors think the current prices are a good deal.
The company has had double-digit weekly growth in SOL per share for two weeks in a straight, showing that they are committed to growing their position. When institutional investors buy a lot of anything, it’s usually because they think it’s a good investment based on fundamental analysis rather than short-term market emotion.
Solana Price Prediction: Critical Levels Define Near-Term Trajectory
The short-term price prognosis for SOL depends on whether it can stay above the $170-$175 support zone. If this level holds up and there is a lot of short liquidation pressure above it, the price could quickly climb above $196 and maybe even $204, which is the recent swing high.
If technical experts confirm a clean break over $200, they say that a stair-step bullish structure could aim sequential legs upward toward $260, $300, and maybe even $400. If the current support levels don’t hold, though, the price might drop to the mid-$160s and challenge the 200-day exponential moving average around $163.
Institutional accumulation, changes in regulations regarding ETF approvals, and strong network fundamentals all point to the idea that longer-term investors may see any major drop as a chance to purchase.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save