- Solana’s network activity will decrease and affect trading fees, but investors’ profits will be driven by the ETF’s outlook.
- Institutional influx and possible ETF approvals could serve as catalysts for SOL’s future benefits.
- Concerns remain in the sustainability of enabled revenues and the impact of staking inflation on Sol’s long-term outlook.
- The rise of a permanent future synthesis on platforms such as high lipids, Aster, and Edgex is affecting solutions.
Solana’s native token Sol surged 10.5% after testing a $191 resistance level on Friday. Despite this short-term rebound, token prices remained around 10% lower in the last two weeks, falling behind competitors such as Ethereum and Binance Coin. Traders are now evaluating whether Sol can regain momentum and challenge the $250 mark amidst weak concerns of recent performance.
Investor sentiment improved over the weekend as the US government hoped to avoid shutdowns, following a signal from President Donald Trump. However, Congress’ efforts to pass temporary funding bills remained stagnant, creating uncertainty about the potential economic impact. Meanwhile, gold prices reached an all-time high of $3,833, reflecting on continuing concerns about US financial stability and debt, which continues to direct investors to rare assets like cryptocurrencies.
The broader crypto market has earned profits, but Sol continues to struggle to maintain its key support levels, partially hampered by reducing activity across the network. Data from Nansen shows that Solana transactions have fallen by 10% over the past week, with nearly 50% fees falling. In contrast, competitors such as BNB Chain and Arbitrum recorded significant increases in transaction fees, highlighting changes in defi activity within the blockchain ecosystem.
The lasting future and competitive dynamics affect Sol’s emotions
The rapid growth of synthetic permanent futures on platforms such as High Lipids, Aster, and Edgex has influenced the overall sentiment towards Solana. Leaders of distributed exchange activities once over protocols such as Meteora and Raydium are under pressure for Solana’s perceived competitive advantage. Hyperliquid’s move to launch its own chain is aimed at reducing fees and maximizing validator revenue, but Aster is backed by YZI Labs (formerly Binance Labs) and will develop its own Layer-1 network to further fragment the ecosystem.
Sol’s future key drivers will depend on the expected approval of US spot ETFs of cryptocurrency, including those based on Solana. The SEC’s final decision is October 10th, with a high probability of approval (estimated to exceed 95%). Such a move could unlock a significant influx and provide much needed momentum for SOL and other crypto assets. Nevertheless, the sustainability of Solana’s staking yields remains a concern given the high operating costs associated with running a validator network of nearly 1,000 nodes.
Analysis from industry experts shows that around 76% of Solana’s effective income is derived from newly issued tokens rather than transaction fees or MEVs. This raises concerns about the long-term sustainability of staking rewards, which could affect the appeal of potential SOL-based ETFs. Despite these challenges, institutional investors’ influx and expectations for regulatory approval continue to underpin optimism about the possibility of a rally to $250.
Ultimately, Sol’s price outlook depends on several factors: the pace of network activity recovery, the development of regulations regarding ETFs, and investor sentiment towards its staking yields. Although short-term volatility remains, institutional profits and market catalyst convergence could provide a significant boost to Solana in the near future.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.