Solana
Solana Price in Danger as Investors Release $580M worth of SOL After Ethereum ETF Approval
Solana Price Versus SOL Staking Trends After Ethereum ETF Approval | Source: StakingRewards.com
Since the approval of the Ethereum ETF became apparent on May 20, Solana node validators have gone into a withdrawal frenzy. As shown in the chart above, Solana investors held a total of 368.8 million SOL in staking contracts as of May 20.
But curiously, they have since quickly withdrawn 3.5 million SOL, reducing total active deposits to 365.3 million SOL at the time of publication on May 24.
Priced at current Solana prices of around $166, the new non-staker SOL Parts worth about $580 million.
When a proof-of-stake (PoS) network witnesses such a large volume of stake withdrawals, it often has a negative impact on the price in the short term.
First, when it implies that investors have attracted, investors have flooded Solana’s short-term market supply with over $580 million worth of coins that were previously locked in staking contracts.
More so, the timing suggests that some core Solana investors may seek to exit early to avoid the potential bearish impact of the recent trend change. Ethereum Market position.
Meanwhile, others may look to diversify from SOL into other altcoins hosted on the Ethereum network, hoping to benefit from the impending influx of funds into ETH ETFs.
If this scenario plays out, Solana price could experience more bearish headwinds, further exacerbating its 14% correction trend seen over the past 3 days.
SOL Price Prediction: Bears to Prevent $200 Breakout?
Solana price managed to rebound above the $165 level at the time of writing on May 24, after falling to $162 within 24 hours of the Ethereum ETF approval verdict.
However, despite the prevailing positive sentiment around the broader crypto sector, withdrawals of $580 million this week could hamper Solana’s prospects of hitting new price highs above $200.
Further confirming this fickle Solana price outlook, SHORT traders have taken control of the SOL derivatives markets.