The cryptocurrency landscape is ever-shifting, and on Tuesday, July 30th, Solana (SOL) experienced a notable dip of 2.5%, bringing its price down to around $177. This decline wasn’t an isolated event; rather, it mirrored a wider market pullback stimulated by the U.S. Federal Reserve’s decision to maintain interest rates between 4.25% and 4.50%. Despite the prevailing selling pressure, Solana managed to remain above a key support level of $170, buoyed by burgeoning speculation surrounding potential Solana-based exchange-traded funds (ETFs).
Solana Price Rebounds on ETF Optimism as 21Shares and Galaxy File Spot Proposals
Fast forward to Wednesday, and the SOL price hit an intraday low of $170.29. However, signs of resilience emerged as selling diminished, creating a long-tail rejection candle—a bullish indicator. This resurgence in buying interest appears closely tied to growing optimism concerning ETF filings from 21Shares and Invesco Galaxy.
Earlier today, 21Shares submitted an updated version of its Spot Solana ETF application to the U.S. Securities and Exchange Commission (SEC). This marks a significant push from the asset management company seeking regulatory approval to launch an SOL-dedicated ETF.
In addition to 21Shares, Invesco and Galaxy Digital have also made strides by submitting their proposals for a spot Solana ETF to the Cboe BZX exchange. These ETFs aim to hold actual SOL tokens, providing investors with a regulated avenue to invest in the cryptocurrency without needing to purchase the tokens directly. If the SEC approves these proposals, we could see a significant influx of both institutional and retail investments, further driving Solana’s adoption and demand.
SOL Price Drives Steady Correction Within Flag Formation
Examining Solana’s recent price action, it’s clear that the SOL price has experienced a brief correction from a high of $206.32 to its current level of $177.62, resulting in a loss of about 14%. Interestingly, this correction is occurring within the bounds of two converging trendlines, indicating the emergence of a bullish continuation pattern known as a ‘flag.’
This flag pattern is defined by a long ascending trendline that acts as a pole, signifying the prevailing bullish trend, followed by a temporary pullback designed to recuperate the exhausted buying momentum. The recent price rejection suggests that the SOL price is bouncing back from the pattern’s support trendline, signaling the potential initiation of a bullish cycle within this flag channel.
With sustained buying activity, analysts believe the SOL price could gain over 3.8%, positioning itself to test the overhead resistance trendline. A successful upward breakout from this flag resistance would provide buyers with essential support to continue their recovery efforts and possibly aim for a target of approximately $2.30.
Nevertheless, investors should remain cautious, as the current correction trend may persist if sellers maintain their defense over the overhead resistance trendline. The evolution of market sentiment will be pivotal in determining Solana’s trajectory in the near future.
