Key takeaways:
SOL struggles to sustain $200 as onchain activity weakens and leveraged demand remains subdued.
A spot ETF approval and institutional support could lift SOL, but current fundamentals suggest limited rally potential.
Solana’s native token (SOL) has repeatedly failed to hold levels above $200 over the past six weeks, leading traders to question what is limiting the upside. The concern is heightened by the fact that competitors Ether (ETH) and BNB (BNB) recently reached new all-time highs.
The potential approval of a Solana spot exchange-traded fund (ETF) in the United States, combined with companies signaling intentions to add SOL to their corporate reserve strategies, could push the token above $250. However, three conditions must be met before a sustainable rally can take hold.
Sluggish onchain and futures data makes investors cautious
For SOL buyers to regain confidence, onchain activity on Solana must strengthen. Network fees fell 17% compared with the prior week, while the number of transactions dropped 10%. Meanwhile, fees on BNB Chain rose 6%, while transaction levels remained flat. Ethereum’s layer-2 activity also showed growth, with transactions on Base rising 14% and Arbitrum gaining 20%.
In relative terms, Solana’s fee levels remain notable given the network’s $12.5 billion in total value locked (TVL), compared with Ethereum’s nearly $100 billion. Still, Solana’s chain revenue has declined 91% from January’s peak, a downturn that coincided with the launch of the Official Trump (TRUMP) token and the broader memecoin frenzy.
The lack of demand for bullish leverage on SOL futures adds to the cautious sentiment.
In neutral conditions, perpetual futures typically show an annualized premium between 8% and 14%, reflecting capital costs and counterparty risk. The current 10% rate indicates balanced demand, which is not inherently negative, but it is mildly concerning given that SOL’s price has already gained 39% over the past two months.
Binance’s top-trader long-to-short ratio has shifted sharply toward bearish positioning. This indicator provides a broader measure of sentiment since it incorporates futures, margin and spot markets.
Demand for bullish SOL exposure on Binance reached a monthly high last Saturday but has since dropped significantly. According to derivatives data, whales and market makers are not aggressively bearish, yet they remain cautious about SOL breaking decisively above $200.
Institutional backing and SEC actions remain key catalysts
SOL’s price showed little reaction to reports that Galaxy Digital, Multicoin Capital and Jump Crypto are working to raise $1 billion for a Solana-focused digital asset treasury company. Bloomberg added that the Solana Foundation has endorsed the initiative, yet the news failed to spark momentum.
Related: Solana devs billed $5K for single query via Google Cloud’s BigQuery
The final obstacle for SOL’s path toward $250 lies with the pending decision from the US Securities and Exchange Commission (SEC) on multiple Solana spot ETF filings. Bloomberg analyst Eric Balchunas estimates approval odds above 90%, though the SEC’s final deadline falls in mid-October.
While SOL could still climb above $200 before these catalysts play out, the likelihood of a sustainable rally remains low given weaker onchain activity, limited demand for bullish leverage, and lingering uncertainty around the ETF outcome.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Coinpectra.