Solana’s native token, SOL, has been grappling with a $150 resistance ceiling since August 12. Despite a surge in decentralized application (DApp) deposits to their highest level since October 2022, SOL’s price remains stagnant, with traders questioning whether network improvements alone can propel it back to $190. Several factors contribute to SOL’s current performance and its struggle to break through this crucial resistance.
ETFs And Regulatory Hurdles
A key factor impacting SOL’s price is the diminished prospects of a spot Solana exchange-traded fund (ETF) in the U.S. On August 16, Cboe Global Markets removed the 19b-4 forms for Solana ETFs from its website. This move has led some to speculate that the U.S. Securities and Exchange Commission (SEC) may have informally rejected the proposal, reflecting Chair Gary Gensler’s earlier skepticism.
Bloomberg’s senior ETF analyst, Eric Balchunas, concurs, suggesting that while S-1 filings from ETF issuers remain active, approval chances are slim—especially without a shift in the SEC administration. The potential for a Solana ETF has thus faded, dampening investor enthusiasm and contributing to SOL’s stagnant price despite promising network metrics.
Market Sentiment and Emerging Competitors
Investor sentiment around Solana is also influenced by broader market dynamics. Crypto trader and investor CoinMamba notes that Ethereum’s average transaction fees have fallen to around $1, diminishing Solana’s relative appeal. Additionally, the rise of other blockchains and the popularity of memecoin launches have diverted attention away from SOL.
Solana’s struggle to maintain its competitive edge is evident as it seeks a new narrative to drive interest. The introduction of PayPal USD (PYUSD), a stablecoin on the Solana network, which recently surpassed $620 million in issuance, highlights Solana’s potential. However, this success has not yet translated into a sustained price increase for SOL.
Ecosystem Growth vs. User Engagement
Despite a notable increase in the total value locked (TVL) on the Solana network, which reached 34.9 million SOL on August 22—a 13.7% rise from the previous month—the growth in TVL has not necessarily translated into increased user engagement. Noteworthy projects such as Jupiter and Kamino have seen significant TVL growth, with Jupiter reaching $1.06 billion and Kamino holding $1.48 billion in deposits. Solana’s TVL in USD now surpasses that of BNB Chain, indicating strong underlying asset value.
Also Read: Solana [SOL] Sees 2% Surge Amid POPCAT Listing – Will Memecoin Trend Boost SOL?
However, this TVL growth is not uniformly reflected in user activity. Over the past month, many top DApps on Solana experienced a decline in unique active addresses, with growth concentrated on a few high-risk platforms. Traditional favorites like Helio, Solend, and Marginfi have seen fewer than 50,000 active addresses each, suggesting that TVL growth alone may not be enough to drive a short-term SOL price rally.
Solana’s ability to overcome the $150 resistance level hinges on resolving several intertwined issues: the regulatory environment, market competition, and actual user engagement. While the network’s fundamentals show promise, the path to a $190 price point remains uncertain. Until these factors align, SOL’s price may continue to grapple with resistance, despite the robust growth in network metrics.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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