Solana Faces Mixed Signals as Staking ETFs Near Approval Despite Technical Bearish Pressure

Quick overview

Solana SOL/USD trades at approximately $156 amid a complex market environment where regulatory progress on staking ETFs contrasts sharply with mounting technical and fundamental pressures threatening further downside.

Staking ETF Breakthrough: REX Shares Takes Regulatory “End-Around”

With the possible introduction of Ethereum and Solana staking ETFs within weeks, the scene of cryptocurrencies could see a historic turning point. ReX Shares has registered for what ETF expert James Seyffart characterizes as “very rare” staking ETFs utilizing a creative company structure to get outside conventional regulatory constraints.

Unlike conventional ETF filings, which helps them circumvent the protracted 19b-4 clearance process delaying other staking ETF applications, these products are structured as C-corporate instead of regular investment companies. By means of Cayman businesses, the funds aim to stake “at least 50%” of their Ethereum and Solana interests, therefore offering investors staking income as well as price exposure.

Still, there remains uncertainty in regulations. Although their registration become active on May 30, the SEC has asked whether these ETFs meet the legal criteria of an investment firm under the Investment Firm Act of 1940. One day after SEC guidelines stating most crypto staking activities outside of securities laws, this regulatory clash results.

SOL/USD Technical Analysis Points to Continued Weakness

Solana dropped below its critical 50-day exponential moving average (EMA), hence technically it is under strong bearish pressure. This fall suggests a probable change in the structure of the market that might extend the current downturn rather than merely a transient dip.

The daily chart reveals a troubling double-top pattern forming at $184.5 while the neckline is placed around $159.45. Considered among the most persistent in technical analysis, this negative trend shows investors are reluctant to buy above historical highs. Targeting roughly $136, a 14% decrease from present levels that matches the 23.6% Fibonacci retrachment, completing the pattern

Supporting indicators confirm the negative viewpoint. The Relative Strength Index (RSI) keeps pointing down as moving averages are converging rather than fanning out—a behavior usually indicating long-term falls. The rapid nature of the current breakdown—occurring without progressive degradation—often speaks to more basic vulnerability.

Solana Ecosystem Fundamentals Show Strain

Beyond simple technological problems, Solana’s environmental data reveal concerning patterns. From around $15 billion to $11.4 billion in market value, the meme coin sector—which has been a main source of network activity—saw a sharp decline. Notables losing a lot are Fartcoin (-28%), Dogwifhat (-18%), and Bonk (-20%).

This meme coin weakness immediately affects Solana’s distributed exchange (DEX) activity as 24-hour volumes falling to $2.23 billion comparison to Ethereum’s $3.4 billion and BSC’s dominant $12.3 billion. Moreover implying decreased liquidity and user involvement is stablecoin supply on the network, which declined from $13 billion to $11.5 billion.

The negative financing rate throughout futures markets suggests institutional traders expecting greater price declines, therefore producing still another depressing signal in an already challenging environment.

Solana Price Prediction: Multiple Scenarios in Play

Short-term pricing action is most likely to test lower levels based on the double-top pattern; $136 is the key negative objective. The next crucial support comes from $105, which, should present current weakness persist, may be a significant psychological turning point.

Traders should be on lookout for any liquidity traps, though. Some analysts think Solana might drop below current levels to trigger stop-losses before attempting a reversal towards above liquid zones. This scenario would demand strong buying pressure and volume to challenge the prevailing bearish structure.

If bulls were to take hold, SOL would have to aggressively recover the $184.5 resistance level, therefore negating the double-top pattern and perhaps beginning upward momentum.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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