- Open interest in SOL derivatives falls from $3.20B to $2.87B.
- Price faces resistance at 50-day EMA, $150 is essential help.
- Polymarket reveals 80% odds of Solana ETF approval.
Solana is beneath stress as June begins, with its price down 18% over the previous three weeks.
The newest set off got here on 30 May, when the US Securities and Exchange Commission (SEC) raised considerations over two proposed staking exchange-traded funds (ETFs) involving Solana and Ethereum.
The company’s response despatched a chill by the derivatives market, with complete open interest (OI) in Solana futures dropping from $3.20 billion to $2.87 billion.
The funding fee additionally slipped into unfavourable territory, indicating declining confidence amongst perpetual merchants.
The ETFs in query have been proposed by REX Shares and Osprey Funds.
While particulars of their constructions weren’t totally disclosed, they aimed to offer publicity to staking-based returns by a regulated car.
However, the SEC flagged “unresolved questions” round whether or not these funds qualify as professional funding corporations beneath the Investment Company Act of 1940. The remark got here by way of a submitting attributed to Brent J. Fields, Associate Director on the SEC.
Solana faces resistance as bearish momentum builds
Solana was already displaying indicators of weak spot earlier than the SEC announcement.
The token confronted constant resistance close to the 50-day exponential transferring common (EMA), with costs unable to interrupt previous the $160–$170 vary all through the second half of May.
After hitting a excessive of $187.19 on 20 May, Solana reversed course and fell to $152.83 by the beginning of June.
On the intraday chart, SOL dropped by 3% as bears gained momentum.
Technical indicators level to additional draw back danger. The rejection from the 50-day EMA band has confirmed bearish management, with merchants eyeing key help zones at $150, $140, and $120.
A sustained break under $150 may see SOL testing its multi-month help ranges final seen in Q1 2024.
The derivatives knowledge mirrors this sentiment. Funding charges, which mirror the price of holding lengthy positions in perpetual futures, turned unfavourable at -0.0044%, down from +0.0033%.
Meanwhile, open interest—a measure of market exercise—fell by over 10% inside per week.
These modifications present that leverage merchants are unwinding their lengthy positions amid elevated regulatory uncertainty.
SEC staking ETF probe deepens regulatory uncertainty
The SEC’s considerations surrounding staking-based ETFs mirror a broader unease with crypto-native monetary devices getting into conventional markets.
Although Ethereum futures ETFs have been authorized in the previous, no product has but supplied returns tied to staking rewards.
Solana, in explicit, poses further dangers as a result of its extra centralised validator set and historical past of community outages.
By elevating objections now, the SEC could also be signalling a more durable stance on newer ETF proposals, particularly these involving yield-generating protocols.
For Solana, this creates further headwinds, as any delay or rejection of staking ETFs may restrict mainstream adoption and capital influx.
Traders and analysts have additionally pointed to the shortage of readability on whether or not Solana is a safety or commodity, a debate that has lingered since 2022.
Despite these short-term roadblocks, the longer-term sentiment seems extra constructive.
On prediction market platform Polymarket, odds of a Solana ETF approval have climbed to over 80%, suggesting that buyers nonetheless see eventual regulatory clearance as probably.
However, the timing and scope of such an approval stay unsure.
Solana’s June outlook hinges on key help ranges
With SOL buying and selling under its 50-day EMA and investor urge for food dwindling in the derivatives area, a lot now will depend on how the market reacts at key help ranges.
A agency defence of the $150 mark may set the stage for a rebound later in the month, particularly if broader crypto sentiment improves.
Conversely, failure to carry $150 might result in additional capitulation in the direction of $140 and even $120.
While some on-chain knowledge reveals constant exercise inside the Solana ecosystem, together with development in decentralised functions and each day transaction counts, price motion stays largely dictated by macro and regulatory forces.
The SEC’s newest feedback have injected a recent dose of uncertainty, and for now, market individuals seem like de-risking.
As Solana enters June on a cautious be aware, its short-term trajectory will probably rely upon two fronts—readability from regulators and a return of speculative interest in high-beta altcoins. Until then, the trail of least resistance seems to be downward.
