Solana's Recent Surge Sparks Moderate Optimism Amid ETF Anticipation
According to Cointelegraph, Solana's native token, SOL, has experienced a 28% rally over the past three weeks, generating moderate optimism in the derivatives market. Despite this positive momentum, major players such as whales and market makers have yet to adopt a bullish stance. Traders are now contemplating what factors could drive SOL towards the $260 mark. The current annualized funding rate for SOL stands at 16%, indicating moderate enthusiasm among retail traders. Typically, under neutral conditions, the funding rate for perpetual contracts ranges between 5% and 15%, suggesting that long positions are paying a premium to maintain exposure.
Despite the recent price increase, SOL has underperformed compared to the broader altcoin market. For instance, Ether (ETH) surged by 51% and XRP by 41% during the same period. Although SOL is now trading near its highest level in five months, around $190, traders remain cautious. To reach the $260 level, SOL requires network growth and a sentiment boost. While leveraged bullish positions are not essential for SOL to reclaim this level, renewed confidence is necessary to counteract selling pressure. Solana's network activity remains 85% below January levels, yet network fees have increased by 27% over the past 30 days, contrasting with declines seen by competitors like BNB Chain and Base.
Solana generated $32.9 million in network fees over 30 days, with $12 billion in total value locked (TVL). In comparison, Ethereum holds $91 billion in deposits. These figures are promising for SOL holders, as staking yield is closely tied to network revenue. To assess whether professional traders are warming up to the idea of a rally to $260, the monthly futures market is worth examining. Under neutral market conditions, these contracts typically trade at a 5% to 10% premium over spot prices. On Monday, SOL's 3-month futures premium reached the neutral 6% level for the first time in five months, marking a departure from earlier bearish sentiment.
Investors are closely monitoring the potential approval of multiple spot Solana exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). Such approval could unlock institutional demand, similar to the success of Ether ETFs, and build on existing products like the REX-Ospray SOL Staking ETF (SSK). Registered under the Investment Company Act of 1940, the SSK ETF does not require the typical SEC S-1 filing. Since its launch on July 2, it has accumulated $130 million in assets under management. Given Solana's strong network activity and growing expectations for a spot ETF approval in the US, the likelihood of SOL reaching $260 in the short term appears strong.
