The Post-ETF Pullback: Solana's Brief Rally Fizzles Out, as Technical Charts Signal Potential for a Deeper Correction.
Solana (SOL), the high-performance blockchain, recently captured headlines with news of its first exchange-traded fund (ETF) going live, triggering a brief price rally. However, this surge proved short-lived. In a swift turn of events, SOL's gains have entirely evaporated within 24 hours, exposing persistent technical weakness across multiple timeframes. Currently trading around $146.55 USD (as of July 1, 2025, mid-North American trading session), and battling crucial support levels, analysts warn that a deeper decline of another 20% could be imminent if key price clusters fail to hold.
1. The Fleeting ETF Rally: A Classic "Buy the Rumor, Sell the News" Scenario
Solana's price experienced an initial boost following the highly anticipated news of its first exchange-traded fund going live.
Initial Surge: On Monday, June 30, SOL rallied by approximately 5%, briefly hitting $160 (and in some reports, even $161) following the confirmation that the REX Shares Solana Staking ETF would launch on July 2, 2025. This news was seen as a significant step for institutional adoption, especially given its staking component.
Rapid Reversal: However, the momentum was short-lived. Within just 24 hours, the altcoin completely erased all its gains, falling back to around $157 (a 4% gain from 24 hours prior) and then further dipping to the $146 range by July 1. This rapid reversal is a classic example of the "buy the rumor, sell the news" phenomenon common in speculative markets, where investors take profits immediately after anticipated good news materializes.
This swift evaporation of gains highlights the market's current cautious sentiment towards Solana, despite its fundamental developments.
2. Technical Weakness: Charts Warn of a Deeper Correction
The Cointelegraph analysis points to persistent technical weakness across both lower and higher timeframes, signaling potential further downside for SOL.
Failure to Maintain EMAs (Lower Timeframe): On the lower timeframes (e.g., daily chart), SOL has consistently failed to maintain a position above its 50-day and 200-day Exponential Moving Averages (EMAs) for over a month. Despite several attempts at bullish "break-of-structure" formations, including a pop above $148 last week, SOL has not converted these into sustainable uptrends.
Key Pressure Point at $148: The $148 level is currently under significant pressure. Analysts warn that a sustained drop below $137 would confirm a "lower low," effectively negating any chance of a near-term bullish continuation and signaling a bearish trend.
Descending Channel (Higher Timeframe): On the higher timeframes (HTF), the broader trend for SOL remains bearish. Since failing to breach key resistance at $180 in May, SOL has consistently trended downward within a descending channel. While such patterns can eventually lead to bullish breakouts, SOL has remained highly sensitive to Bitcoin's weakness throughout the past month, further contributing to its underperformance.
UTXO Realized Price Distribution (URPD) Insights: SOL's URPD, a metric tracking token acquisition prices, reveals a critical supply cluster of 14.3% between $144.5 and $147.7. This dense cluster acts as a crucial support base. However, a breach below $144 would signal significant weakness, increasing the likelihood of a retest of lower support zones.
Thinning Support Below $144: Below this critical $144 threshold, support thins out considerably. The next significant supply concentration is at $124 (1.58%) and then $100-$97 (3%). If price fails to hold above $144, the market risks a deeper decline towards these levels, where thinner supply could amplify volatility, potentially leading to a 20% drop to $124 or even a retest of the $95-$100 range.
3. Underlying Factors Weighing on Solana's Price
Beyond immediate technicals and the "sell the news" effect, several other factors contribute to SOL's recent struggle:
Staking Unlocks and DApp Selling: Even with the bullish news of a staking ETF, a significant amount of $585 million worth of SOL is set to be unlocked from staking over the next two months. This influx of supply could create further selling pressure. Additionally, some of Solana's successful dApps have reportedly sold off their SOL holdings; for example, Pump.fun transferred over $404 million worth of SOL to exchanges in 2025 alone.
Muted Institutional Demand (Initial Phase): Despite the ETF launch, initial institutional demand might remain muted. The funding rate for SOL futures has failed to break above the neutral 10% threshold, indicating a lack of excessive demand for bullish leverage, a key component for aggressive institutional buying.
Declining Network Activity: Despite Solana's strong DEX volumes (surpassing Ethereum in 30-day volume), its overall network revenue has dropped by over 90% since January 2025. This underlying decline in general network activity (beyond just DEX trading) raises questions about the sustained utility and could weigh on investor sentiment.
Memecoin Reliance: Solana's ecosystem heavily relies on the memecoin sector, which has seen a significant slowdown. Most prominent memecoins on Solana have lost 25% or more in the past 16 days, dampening enthusiasm and overall network demand.
4. The Road Ahead: What Could Flip Sentiment?
While the current outlook appears cautious, analysts outline scenarios that could reverse the bearish trend:
Reclaiming Key Resistances: For SOL to regain upside momentum, a successful retest of the $145-$137 demand zone, followed by a decisive recovery above $160, remains pivotal. A strong daily close above $160 in the coming weeks could flip sentiment and accelerate a bullish reversal.
Sustained Institutional Inflows: Consistent and growing inflows into the new Solana ETFs could provide the necessary buying pressure to overcome existing selling pressure and trigger a rally.
Network Activity Recovery: A reversal of the declining trend in overall network activity and a resurgence in diversified dApp usage beyond memecoins would signal fundamental strength.
Conclusion: Solana at a Critical Juncture
Solana's recent ETF-driven rally has evaporated, leaving the altcoin at a critical juncture. While the launch of a staking ETF is fundamentally positive, immediate market dynamics, characterized by a "sell the news" reaction and persistent technical weakness, suggest caution. With charts warning of another potential 20% drop to the $124 range, or even lower if key support at $144 fails, investors should closely monitor price action and fundamental catalysts. The coming days will be crucial in determining whether Solana can hold its ground and leverage its long-term potential, or if it will experience a deeper correction before finding its next major support.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high level of risk and volatility. Always conduct your own research (DYOR) and consult a professional financial advisor before making any investment decisions.
