In the last three days Solana ($SOL) suffered a sharp fall, along with the rest of the market.
The altcoin accumulated a loss of 12% on the weekly chart.
The decline was fueled by a series of positive economic data from the United States, which raised concerns about a rebound in inflation. This situation could delay the Federal Reserve's plans to ease monetary policy.
The Labor Department reported an unexpected increase in job vacancies in November, and another report showed growth in service sector activity in December. The data showed strong economic growth pushing the 10-year Treasury yield to 4.699%, the highest since April 26.
After the release, Bitcoin fell below the $97,000 mark, Ethereum slipped below $3,400, and Solana fell below the $200 mark.
In addition, a critical deadline is approaching for SOL: the deadline for applications for the authorization of Spot Exchange-traded Funds (ETFs) on Solana, which will be submitted to the United States Securities and Exchange Commission (SEC). On January 23, the SEC will decide whether to approve or deny Grayscale's application.
According to Nicolai Søndergaard, an analyst at research company Nansen, Spot ETF on Solana will appear on the market this year, the only question is when.
“The real unknown relates to the number of iterations necessary before the proposal is approved, as happened for Bitcoin and Ethereum. However, I am sure that there will definitely be a Solana ETF in 2025,” he said at the 2024 event organized by Cointelegraph.
According to bets on the Polymarket platform, the chance of the Solana spot ETF being approved in 2025 is 74%.
Solana: The essential support level to watch is the $175 mark
Analysts believe that traders are still working in mode “profit taking” ahead of Donald Trump's first speech.
Immediately after the election of the pro-crypto candidate, the crypto market got a boost. Market capitalization has surpassed $3 trillion, with Bitcoin ($BTC) breaking the psychological threshold of $100,000 for the first time.
Solana hit a new all-time high of $264, fueled by the belief that the Trump administration could enter an era of crypto-friendly regulatory policies and greater acceptance of the asset by traditional investors and institutional.
The narrative is still being played out which is why some analysts believe this is an opportunity.
Meanwhile, if the Solana Spot ETF is approved, billions of dollars from retail and institutional investors could flow into the new fund and help push the altcoin higher.
For now, Solana's latest move has partially reversed the bullish breakout of a flag pattern that has developed over the past month and a half. The recent three-day drop brought the altcoin back into the consolidation zone, thus undermining the bullish trend.
Currently, the main resistance against overcoming it in the coming days is placed at $225, a critical level if buyers were to regain control of the market.
However, if the selling pressure persists, the key support is at $175. A break below this level could cause a strong move, bringing the fund back below the levels reached after the elections.
Such a strong reversal of the bullish trend seems unlikely, as the macroeconomic factors that pushed $SOL to new all-time highs still favor strong growth in the medium and long term.
Solaxy (SOLX), the first layer 2 on the Solana blockchain
In the meantime, investors are focused not only on Solana, but also on a new project: Solaxy (SOLX). This is the first series 2 on the Solana blockchain.
Its pre-sale exceeded expectations, raising more than $9 million.
Solaxy is not only a new project in the crypto landscape, but it aims to solve one of Solana's main problems: the density of its blockchain. Using Layer 2 technology, Solaxy manages to improve Solana's performance without compromising integrity.
Transactions are processed through the Solaxy network, while maintaining full compatibility with Solana, allowing the system to operate smoothly even during periods of increased activity.
In addition, Solaxy is a multi-chain solution that aims to integrate and leverage the best features of both Solana and Ethereum.
The $SOLX token is also available in the feature “Accounts Due” of the new Web3 crypto wallet Best Wallet.
