TLDR
- SOL broke through the $70 level on Friday, falling more than 6% from its June 15 peak of $75.60.
- Morgan Stanley has filed an updated S-1 filing with the SEC for the Solana ETF (MSOL) product.
- Weekly capital inflows into SOL ETFs reached $7.11 million even as prices declined
- Solana has emerged as the leading blockchain for real-world assets tokenized by the number of holders, surpassing 285,000 holders.
- Critical support area identified at $70; A breakout could lead to a decline towards the June lows of $62
Solana saw a sharp reversal from its recent high of $75.60, and fell to an intraday low of $70.70 on June 18 before finding temporary support around $71. This contraction followed a strong 20%+ rebound from the $62 low in early June.
Downward pressure intensified following the Fed’s decision to keep interest rates within a range of 3.50%-3.75%, coupled with cautionary language on persistent inflation threats. Fed officials have signaled the possibility of additional policy tightening through 2026, prompting investors to pull back from highly volatile assets like SOL.
Bitcoin meanwhile fell towards the $64,000 mark in response to the Fed’s stance. Many major altcoins saw more pronounced declines compared to Bitcoin during this period.
Cryptocurrency analyst Ash Crypto noted that SOL’s monthly chart indicators are showing the most oversold conditions in its history. He also noted that Solana achieved a new milestone for token stock trading volume in a single day, processing more than $140 million in instant transactions – 97% of the total cryptocurrency market share, outperforming all competing blockchains combined.
Despite the downward price movement, institutional appetite for exposure to Solana remained strong. SOL-based ETF products attracted $2.99 million in a single day on Thursday, contributing to a weekly total of $7.11 million in net inflows.
ETF Deposit and Institutional Moves
Morgan Stanley filed a revised S-1 registration statement with the Securities and Exchange Commission on Thursday for its Solana-focused exchange-traded fund, which will trade under the ticker MSOL. This filing represents the latest in a series of institutional developments surrounding SOL in recent weeks.
Eight consecutive months of positive net flows into SOL ETF products demonstrate continued institutional conviction. Continued capital inflows throughout next week are likely to shift the monthly balance from marginally negative territory to positive territory.
RWA’s dependence on Solana
On the hash adoption front, Solana takes first place among blockchains in terms of number of real-world asset holders. The network now hosts more than 285,000 token holders of RWAs, with the SpaceX token IPO acting as an important catalyst.
Despite these positive on-chain developments, derivatives market data paints a more cautious picture. SOL futures open interest shrank to $4.85 billion on Friday, down from $5.18 billion just two days earlier on Wednesday.
The total liquidations of long positions in the past 24 hours reached $13.66 million, significantly exceeding the $1.80 million in short liquidations, indicating a clear bearish control over the market.
Market analyst Batman noticed this Solana “It was rejected by the previous support level, which has now become a resistance level,” and that the stochastic indicator has risen to the same overbought zone that preceded the previous important top.
CoinGlass liquidation heatmap analysis reveals concentrated leveraged positions between $74 and $76. Another large liquidity pool is in the $65 to $66 range.
The critical near-term support level holds at $70. A confirmed daily close below this threshold could accelerate the move towards the June low near $62, as Fibonacci extension levels indicate a potential downside towards $60.
For bullish momentum to reassert itself, SOL needs a final daily close above the downtrend line, with upper resistance barriers at $74.80 and $79.30.
