Solana's price has experienced a significant rebound, surpassing $200 after dropping to $189 earlier in the day. This recovery can be attributed to a substantial transfer of $55 million from Pump.fun's fee account to the Kraken cryptocurrency exchange.
The price began to rise around 6:00 pm UTC on January 1, following two significant deposits made by Pump.fun. The first transfer, valued at $22.8 million, occurred at 4:37 pm UTC, while the second, worth $32.7 million, was completed at 5:45 pm UTC, according to Solscan data.
Despite this recent recovery, Pump.fun has been selling a significant amount of Solana throughout 2024. They have deposited over $303 million worth of SOL to Kraken and sold more than $41 million worth of SOL tokens, as reported by Lookonchain data. This activity highlights the volatility in the Solana market, influenced by memecoin platforms and their impact on investor sentiment.
Investors are optimistic about the potential approval of a spot Solana exchange-traded fund (ETF) in the United States. Historical chart patterns and increasing anticipation suggest that SOL could reach $400 by the end of 2025, particularly if the ETF is approved. The decentralized predictions market, Polymarket, reports a 76% likelihood of such an approval.
The uncertainty surrounding ETF approval could have a positive price impact for Solana. Alejo Pinto, founder of the Solana layer-2 network Lumio, believes that the low probability of approval is not yet priced into the market, indicating potential for significant upward movement. Several asset management giants, including VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital, are competing for a spot Solana ETF. Grayscale's application deadline is set for January 23, with preliminary decisions for the other applicants expected by January 25.
The approval of Brazil's first Solana ETF on August 7 has set a precedent for other jurisdictions, potentially leading to similar initiatives in the United States and beyond. This development has fueled trader anticipation and contributed to Solana's price climb back above $230 on December 11. Bitwise has set a target of $750 for Solana.
The interplay between institutional interest and retail trading dynamics will be crucial in shaping Solana's trajectory as the market continues to evolve. The upcoming decisions regarding ETF applications will be closely monitored by investors and analysts, as they could significantly influence market sentiment and price movements in the coming months.