Solana’s (SOL) price experienced a sharp decline this past week, with the token dropping over 12% by September 4th. This downturn coincides with a significant sell-off by the memecoin launch platform Pump.fun.
Memecoin Sell-Offs Hit Solana
Solana’s recent price decline follows Pump.fun’s sale of $1.38 million worth of SOL tokens. The platform has sold a total of $41.64 million worth of SOL at an average price of $157.50 per coin. Large-scale selling by such entities, often referred to as “whales,” can significantly impact a cryptocurrency’s price action, and traders closely monitor these patterns for short-term market cues.
Memecoins Adding Pressure?
The current memecoin craze on Solana might be contributing to the token’s price pressure. As users continue to launch memecoins on Pump.fun, Solana’s price has stagnated, according to crypto trader Luke Martin. He noted that Solana’s upward momentum halted once memecoin launches began flooding the platform.
Bitcoin’s Influence on Solana
Solana’s price also remains closely linked to Bitcoin’s performance. Over the past three months, Bitcoin’s price has dropped nearly 18%, while Solana has seen a 22% decline. This correlation suggests that broader market trends, including Bitcoin’s movements, are influencing Solana’s trajectory.
Could a Solana ETF Turn Things Around?
Amid this market uncertainty, the prospect of a Solana ETF listing in the U.S. could serve as a major price catalyst. While Brazil approved its first Solana ETF in August, a U.S. listing remains uncertain. However, if approved, a Solana ETF could significantly boost the token’s price, similar to the impact seen with Bitcoin ETFs.
Alejo Pinto, a former IBM blockchain growth lead, and other experts believe that a U.S. Solana ETF could have a positive impact due to its current low probability, which means the potential approval isn’t fully priced in.
What Lies Ahead for Solana?
As the market navigates memecoin launches and broader crypto trends, Solana’s future could hinge on regulatory developments like a potential ETF approval. Investors are watching closely to see if these factors can lift Solana from its current price slump.
