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Solana Price Analysis: SOL Traders Could Earn 80% Profits from Ethereum ETFs Launch

By:
Ibrahim Ajibade
Published: Jun 23, 2024, 14:54 GMT+00:00

Key Points:

  • Solana (SOL) price has consolidated above the $130 territory in the last 48 hours, as the Ethereum ETFs launch draws closer.
  • Solana has cornered 42.6% of the Non-Ethereum based (Non-EVM) DeFi market, with an active TVL of $4.12 billion.
  • Solana DeFi ecosystem has attracted more than $951.7 million, accounting for 30.9% of the total funds flowing out of the Ethereum network.
Solana (SOL) price forecast

In this article:

Solana price has consolidated above the $130 territory in the last 48 hour. Having cornered over 30% of the total funds flowing out of the Ethereum network, SOL is well poised to benefit from the impending spot ETH ETF launch.

SOL DeFi Ecosystem Well-Positioned to Benefit from Ethereum ETF Inflows 

Since Solana launched in 2020, a handful of breakout projects have threatened to snatch the “Ethereum-killer” title. 

But, 4 years on, thanks to a superior tech stack, efficient DeFi ecosystem, and burgeoning global meme community, Solana has emerged as the most sought-after cryptocurrency network for decentralized finance transactions behind Ethereum.

Solana TVL vs. NON-EVM Chains | June 17, 2024 | Source: DeFillama
Solana TVL vs. NON-EVM Chains | June 17, 2024 | Source: DeFillama

In affirmation of this stance, the DeFiLlama chart above shows how Solana has cornered 42.6% of the Non-Ethereum based (Non-EVM) DeFi market, with an active Total Value Locked (TVL) of $4.12 billion.

But looking ahead, Solana appears perfectly poised to widen this gap when Ethereum ETFs officially launch in the next couple of weeks. 

The current on-chain data trends from Wormhole, Ethereum’s largest cross-chain bridge, show that Solana remains the leading destination for ETH investors looking to migrate their assets for multi-chain transactions and profit optimization.

Ethereum investors have bridged assets worth $3.09 billion over the past year. As illustrated in the snapshot above, the Solana DeFi ecosystem has attracted more than $951.7 million, accounting for 30.9% of the total funds flowing out of the Ethereum ecosystem.

Cross-chain Fund-flows from Ethereum to Solana - June 2023 to June 2024 | Source: Wormhole
Cross-chain Fund-flows from Ethereum to Solana – June 2023 to June 2024 | Source: Wormhole

The impending launch of Ethereum ETFs is set to propel the funds flowing into the Solana DeFi ecosystem even higher in the coming months.

Bitcoin ETFs have accumulated nearly $60 billion worth of BTC within 6 months post-launch. Based on conservative estimates, Ethereum ETFs are likely to attract approximately 50% of that amount within the same timeframe. That figure could even be higher than $30 billion due to asset re-hypothecation and passive income opportunities presented by the Proof-of-Stake consensus.

Taking a cue from the chart above, having attracted 30.85% of all bridged outflows from Ethereum in the past year, Solana is well-positioned to pull a sizeable amount of the potential spot ETH ETF fund inflows in the coming months.

If the inflows into the Solana DeFi ecosystem surge as predicted, invariably, SOL price is poised to experience considerable upside.

Solana Price Forecast: Bulls to Halt Further Downswings below $130

Solana is currently trading at approximately $102.74, experiencing a modest gain of 1.62% within the daily timeframe on June 23.

The price action shows SOL fluctuating within a descending triangle pattern, bounded by downward-sloping resistance and horizontal support. This pattern typically signals bearish continuation, but the strong defence of the 200-day SMA adds a layer of complexity to that outlook.

Solana price forecast | SOL/USD 
Solana price forecast | SOL/USD

The resilience at the 200-day SMA suggests a possible rebound if buying pressure continues to sustain above this level. Conversely, a break below could trigger further downside, potentially targeting lower support zones around $100. Key resistance levels to watch include $142.50 and $159.14, which could act as barriers to any upward movement.

Investors should closely monitor these technical indicators, as a decisive move in either direction could set the tone for SOL’s mid-term price trajectory. The interplay between the 50-day and 200-day SMAs, along with the significant horizontal levels, will be crucial in determining the next major trend for Solana.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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