Open curiosity in SOL derivatives falls from $3.20B to $2.87B.
Value faces resistance at 50-day EMA, $150 is essential assist.
Polymarket exhibits 80% odds of Solana ETF approval.
Solana is below stress as June begins, with its value down 18% over the previous three weeks.
The most recent set off got here on 30 Could, when the US Securities and Trade Fee (SEC) raised considerations over two proposed staking exchange-traded funds (ETFs) involving Solana and Ethereum.
The company’s response despatched a chill by way of the derivatives market, with whole open curiosity (OI) in Solana futures dropping from $3.20 billion to $2.87 billion.
The funding price additionally slipped into unfavourable territory, indicating declining confidence amongst perpetual merchants.
The ETFs in query have been proposed by REX Shares and Osprey Funds.
Whereas particulars of their constructions weren’t absolutely disclosed, they aimed to offer publicity to staking-based returns by way of a regulated automobile.
Nonetheless, the SEC flagged “unresolved questions” round whether or not these funds qualify as respectable funding firms below the Funding Firm Act of 1940. The remark got here through a submitting attributed to Brent J. Fields, Affiliate 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 Could.
After hitting a excessive of $187.19 on 20 Could, 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 assist zones at $150, $140, and $120.
A sustained break under $150 might see SOL testing its multi-month assist ranges final seen in Q1 2024.
The derivatives information 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%.
In the meantime, open curiosity—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 coming into conventional markets.
Though Ethereum futures ETFs have been authorised previously, no product has but supplied returns tied to staking rewards.
Solana, specifically, poses extra dangers resulting from its extra centralised validator set and historical past of community outages.
By elevating objections now, the SEC could also be signalling a harder stance on newer ETF proposals, particularly these involving yield-generating protocols.
For Solana, this creates extra headwinds, as any delay or rejection of staking ETFs might restrict mainstream adoption and capital influx.
Merchants and analysts have additionally pointed to the dearth of readability on whether or not Solana is a safety or commodity, a debate that has lingered since 2022.
Regardless of 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 seemingly.
Nonetheless, the timing and scope of such an approval stay unsure.
Solana’s June outlook hinges on key assist ranges
With SOL buying and selling under its 50-day EMA and investor urge for food dwindling within the derivatives area, a lot now relies on how the market reacts at key assist ranges.
A agency defence of the $150 mark might set the stage for a rebound later within 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.
Whereas some on-chain information exhibits constant exercise throughout the Solana ecosystem, together with progress in decentralised functions and each day transaction counts, value 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 members look like de-risking.
As Solana enters June on a cautious observe, its short-term trajectory will seemingly depend upon two fronts—readability from regulators and a return of speculative curiosity in high-beta altcoins. Till then, the trail of least resistance seems to be downward.
