Solana (SOL) experienced a sharp decline, with its price dropping over 19% in just 24 hours to around $115.54, on August 02, marking its lowest level in five months. This drop is part of a broader correction cycle that began a week ago when SOL reached a local high of around $194. The global market cap of Solana has also taken a hit, decreasing by 19.02% to $53.88 billion.
No Buying Interest for Solana?
The price drop for Solana occurs during a period of increased interest in cryptocurrencies, especially because traders are looking forward to the introduction of Solana ETFs in the United States. However, the current decline in cryptocurrency values has been mostly linked to a stock market sell-off that has affected several digital assets.
The declining trend is further supported by on-chain measurements, which offer real-time insights into the activity on the Solana network. Solscan data indicates a decline in the network’s overall SOL transfer volume or on-chain volume. This decrease in volume is interpreted as a bearish indication for the cryptocurrency SOL since it shows a loss in usage and demand.
The focus of the market is shifting to which cryptocurrency Spot ETF will come next as it anticipates the introduction of Spot Ethereum ETFs, which are scheduled to start trading on July 23.
Considering that two fund issuers, VanEck and 21Shares, have already submitted applications for a Solana Spot ETF, Solana seems to be a serious candidate.
Spot ETF applications for Ripple’s XRP, on the other hand, have not yet been submitted. However, this could happen soon, particularly after the Spot Ethereum ETFs were approved.
Rising Impact on SOL Price
Solana’s recent slump is a reflection of the worldwide stock and cryptocurrency market selloff that has escalated because of mounting fears about the economic outlook and whether or not the US Elections will live up to the hype. Growing geopolitical unrest in the Middle East is eroding investor confidence even more.
The wider cryptocurrency market is still tense due to Solana’s price volatility, and traders and investors are keeping a careful eye out for any indications of stabilisation or additional drops. As the market responds to both internal events and external economic forces, the upcoming weeks may prove crucial for Solana and other significant cryptocurrencies.
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