Solana Faces Price Drop and Volatility Amid SEC Scrutiny, ETF Uncertainty, and Token Unlock Pressure

Solana (SOL) is undergoing significant volatility with a recent 18% price decline in May 2025, driven by heightened U.S. Securities and Exchange Commission (SEC) scrutiny over proposed Solana and Ethereum staking ETFs. The SEC raised concerns regarding these products’ compliance with the Investment Company Act of 1940, causing uncertainty among investors. This regulatory anxiety led to a sharp drop in open interest in SOL futures from $3.20 billion to $2.87 billion, while perpetual futures funding rates turned negative—both signs of fading trader confidence. At the same time, over 6 million SOL tokens valued at approximately $864 million are soon to be unlocked, potentially adding supply-side pressure. Historically, such large-scale unlocks have resulted in near-term price corrections. Key technical levels to watch are the 50-day exponential moving average and crucial support at $150; a breach could set the stage for further declines to $140 or even $120. The market shows a tug-of-war between bullish sentiment from ETF approval hopes—Polymarket assigns an 80% probability of ETF approval—and bearish sentiment from regulatory scrutiny and unlock-related risk. Currently, traders are de-risking and waiting for regulatory clarity and renewed speculative interest before re-entering. Overall, Solana’s price outlook is shadowed by both regulatory headwinds and internal tokenomics, with volatility likely to persist.