Solana Falls Below $200 Ahead of Spot ETF Approval and Potential Rally
Solana (SOL) slid to $192 on Thursday, wiping out gains from its eight-month high of $253. The 19% drop has shaken short-term momentum, but a key catalyst looms: the Grayscale spot SOL ETF decision on October 10. If approved, this could unlock significant institutional inflows similar to recent Bitcoin (BTC) and Ethereum (ETH) ETF launches.
Currently, institutions hold under 1% of SOL, compared with 16% of BTC and 7% of ETH, according to Pantera Capital. Five additional spot ETF applications from Bitwise, 21Shares, VanEck, Grayscale and Canary face SEC deadlines through October 2025, underscoring growing institutional interest.
Technically, SOL remains in a long-term uptrend with higher highs and lows. The current pullback is testing the key $200–$185 support zone, overlapping the 0.50–0.618 Fibonacci retracement level. A breach below $185 would weaken structure, shifting focus to $170–$156.
On the four-hour chart, the RSI dipped below 30—an oversold signal that has led to four rebounds in the past five instances. This suggests the short-term bottom may be in place and that SOL could recover ahead of or after ETF approval.
While Polymarket assigns only a 41% chance of a new all-time high by 2025, the combination of technical oversold conditions and potential institutional adoption makes a bullish case for SOL’s next leg up.
Bullish
The drop below $200 has created a clear buying window ahead of the Grayscale spot SOL ETF decision on October 10. History shows that approval of spot ETFs for major assets like BTC and ETH led to substantial institutional inflows and sustained rallies. Institutional ownership of SOL is currently below 1%, leaving significant room for growth if a spot ETF is green-lit. On-chain and on-exchange liquidity are likely to expand, improving market depth.
Technically, SOL remains in a long-term uptrend with higher highs and lows. The correction is holding at the $200–$185 support zone, aligned with the 0.50–0.618 Fibonacci retracement level—often a trigger area for rebounds. The four-hour RSI dipping below 30—a historically oversold reading—has preceded four of five rapid rebounds this year, suggesting the recent pullback may be nearing completion.
Short-term traders can watch for bullish reversal patterns or RSI recovery above 30 to confirm entry. In the medium to long term, SEC approvals of SOL spot ETFs and increasing integration by payment platforms like Stripe and PayPal could drive broader adoption and push SOL toward new highs, mirroring Bitcoin’s ETF-driven rally.