- Hopes for Solana ETFs were postponed until 2025 after reports that recent applications could be rejected.
- A recap of SOL price action and Solana’s on-chain activity as TVL soars to new highs.
The Solana [SOL] The community has been eagerly waiting to join the ETF hype train that has seen several companies file with the SEC. However, new reports suggest that Solana ETFs may not launch this year.
Solana was the next obvious choice after the successful launch of Bitcoin and Ethereum ETF. Several companies, including VanEck, Bitwise, Grayscale Investments, 21Shares and Canary Capital, were among the first to apply for Solana ETFs.
A recent report has revealed that the US SEC has informed at least two of the applicants that it intends to reject the applications. The report stated that the reason for the planned rejection was the ambiguity surrounding Solana’s asset classification, particularly concerns that it could be a security.
What are the implications for SOL price action?
Historically, the hype surrounding Bitcoin and Ethereum ETFs led to excitement around their price action days before launch. However, once the ETFs launched, prices fell, indicating that ETF approvals tend to be ‘buy the rumors’ and ‘sell the news’ events.
If ETF applications are rejected, it is unlikely to impact the price. However, the effect, especially in the long term, would have been an influx of institutional liquidity, potentially pushing SOL prices higher in the subsequent months after approval.
SOL has already achieved robust upside potential this year, judging by the fact that it recently traded comfortably above $200. The final retracement after a rise to a new high indicates that some profit taking has occurred recently. It exchanged hands for $235.88 at the time of writing.
Source: TradingView
SOL is likely to regain prices above $200 if market sentiment remains bullish in December. It is also possible that the price could rise even further if demand increases sharply.
On the other hand, capitulation could result in intense selling pressure. In that case, the price could fall as low as $157 before retesting the next major support level.
Solana maintains robust performance in the chain
Although prices have slowed recently, the network maintained positive momentum in other key areas. For example, the TVL just clocked a new ATH of $11.69 billion.
Source: DeFiLlama
Read Solana’s [SOL] Price forecast 2024–2025
Solana’s on-chain volume rose to $5.88 billion in the past 24 hours. This underlines the healthy networking activity that Solana continued to cultivate.
Speaking of network activity, transactions on the network grew steadily in the fourth quarter. For context, daily transactions on the network were in the range of 40 million and have since risen above 50 million transactions.
