Solana (SOL) is currently experiencing a surge in market activity, fueled by growing institutional interest and increasing speculation surrounding the potential approval of a spot Solana ETF in the United States. The open interest in Solana futures has reached a two-year high, surpassing $7.4 billion, which has sparked discussions about whether SOL can reach the $200 mark soon.
Increased Institutional Interest: The rise in open interest in SOL futures indicates a significant increase in participation from institutional investors. This surge in activity suggests that more sophisticated market participants are taking positions in Solana, anticipating potential price movements. Demand from buyers is always matched by sellers, but the rise in activity signals increased participation from institutional investors. With $7.4 billion in open futures positions, SOL is drawing more attention from savvy market participants. This creates more opportunities for arbitrage strategies like the “carry trade,” where investors buy SOL on the spot market and sell the futures contract. A liquid and active derivatives market supports these trades.
ETF Speculation: One of the primary drivers behind the recent surge in Solana's market activity is the increasing likelihood of a spot Solana ETF being approved by the SEC. Bloomberg's Eric Balchunas has suggested that Solana could be among the first altcoins to receive ETF approval, potentially leading to an "Altcoin ETF Summer." Polymarket traders are now placing a 91% chance on a 2025 spot Solana ETF approval. Multiple spot Solana ETF applications from asset management giants like VanEck, Grayscale, 21Shares, Bitwise and Canary Capital signal robust demand for regulated SOL investment vehicles. The final approval deadline for the U.S. Solana spot ETF is October 10th, with analysts stating a 90% probability of approval. Improvements in on-chain metrics may simultaneously drive SOL to break $200 before ETF approval.
On-Chain Activity and Ecosystem Growth: Beyond the futures market, Solana's on-chain activity and decentralized finance (DeFi) ecosystem are also experiencing growth. Total Value Locked (TVL) in Solana's DeFi protocols has reached levels not seen since June 2022, reaching 56.8 million SOL this month—roughly $9.1 billion. Active Solana addresses have also surged, with a 38.5% increase in a single day, reaching 2.7 million. The top five Solana DApps are seeing wallet activity climb between 77% and 300%, suggesting the whole ecosystem is heating up.
Technical Analysis and Price Targets: Technical analysis suggests that Solana could be poised for a breakout. On the weekly chart, SOL is forming a bull flag pattern. If the pattern completes, Fibonacci extension analysis shows the next Solana price zone at $260 (0.27 extension) and $330 (0.618 extension)—making $200 achievable and putting $1,000 as a longer-term blue-sky possibility if the bull run is sustained.
Challenges and Risks: Despite the bullish sentiment, there are challenges and risks to consider. Declining DEX activity cast doubt on a breakout to $200. A critical factor beyond headlines is the changing supply on exchanges. Glassnode data reveals over 2.7 million SOL (worth $423 million at recent Solana price USD) returned to exchanges in just nine days—usually a bearish signal, as traders look to take profits after rallying on hype. These inflows follow an earlier period of heavy accumulation fueled by ETF hopes and bank adoption news.
Conclusion: Solana's futures open interest has reached a two-year high amid increasing speculation about a spot ETF approval. While technical analysis and growing on-chain activity suggest that SOL could reach $200, several challenges, including whale outflows and declining network activity, could impact this rally.
