Solana’s price prediction: Is SOLUSD’s dip a major buy opportunity?

In the ever-evolving world of cryptocurrency, Solana (SOL) has captured significant attention. Known as one of “crypto’s big three,” Solana’s potential approval for spot exchange-traded funds (ETFs) in the United States could be a game-changer. A recent report from GSR Markets indicates that this move could catapult the price of SOL to nine times its current value. With the crypto market showing mixed price action recently, could Solana be on the brink of a major surge?

Current market trends and Solana’s performance

Solana has experienced a bearish trend recently, with its price dropping since the beginning of the month. It hit a 30-day low below $123 against the dollar, a significant decline from its monthly high of $175. However, some analysts remain optimistic about Solana’s long-term prospects. According to Bitcoin expert Crypto Patel, a ‘cup and handle’ formation on the Solana/TetherUS 1-week chart suggests Solana has the potential to hit $1,000 in the future.

A 27 June report by GSR Markets highlighted the potential of spot Solana ETFs to significantly boost SOL’s price. GSR’s analysis suggests that if these ETFs capture 14% of the flows seen by spot Bitcoin ETFs, Solana’s price could increase by 8.9 times, exceeding $1,320. This estimate is based on the assumption that the relative market cap size of Solana would attract similar investment flows.

The GSR Markets report also outlined different scenarios for Solana’s price trajectory:

Blue Sky Scenario: Solana’s price could rise from $149 to over $1,320, with its market cap soaring to $614 billion.

Baseline Scenario: If Solana ETFs capture 5% of Bitcoin ETF flows, SOL’s price could rise by 3.4 times.

Bear Scenario: With only 2% of Bitcoin ETF flows, SOL’s price might still see a 1.4 times increase.

Analysts note that these projections could be even more optimistic if staking rewards are included in the spot Solana ETFs, though current regulations do not allow staking in approved spot Ether ETFs.

Solana’s regulatory hurdles and market sentiment

Despite GSR’s positive outlook, regulatory challenges remain. The U.S. Securities and Exchange Commission (SEC) and its chair, Gary Gensler, have reportedly labelled SOL as a security in lawsuits against major exchanges like Binance and Coinbase. This classification complicates the pathway to approval for spot Solana ETFs, unlike the now-approved spot Bitcoin and Ether ETFs.

Bloomberg ETF analyst Eric Balchunas suggests that a change in the U.S. president and the SEC chair might be necessary for a spot Solana ETF to be seriously considered. However, there is momentum in North America, as seen with VanEck’s recent filing for a spot Solana ETF and cryptocurrency asset manager 3iQ’s application in Canada, marking a North American first.

As Solana navigates its current bearish trend, the potential approval of spot Solana ETFs could mark a significant turning point, making the current downturn a major buy opportunity. At the time of writing, SOL appears to be edging down towards the $140 price point, with prices below the 100-day moving average and RSI pointing down at the 50 midline – hinting that bears are in control at the moment.

Sellers could encounter a hurdle at the $137.73 price point. A further move down could find support at the $121.43 support.  Conversely, a price bounce could encounter resistance at the $159.60 price level.

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