Solana News Today: Why is SOL Rising, Reach $500 or Crash Again?

Solana (SOL) has made a strong comeback after experiencing a sharp decline of over 15% in the past week. At the time of writing, the cryptocurrency is trading at $126.90, reflecting a 2.34% intraday gain. Its market capitalization currently stands at $64.64 billion, with a 24-hour trading volume of $3.62 billion.

The recent rebound has sparked renewed interest among investors and analysts, many of whom are now questioning whether Solana’s bullish momentum will continue and if the cryptocurrency could reach new all-time highs.

Key Factors Driving Solana’s Recovery

Several important developments have contributed to Solana’s price surge, bolstering investor confidence and reviving optimism in the digital asset’s future trajectory.

Franklin Templeton’s Solana ETF Filing Sparks Market Optimism

A significant catalyst behind Solana’s latest price movement is Franklin Templeton’s decision to file for a Solana Exchange-Traded Fund (ETF) in the United States. The asset management giant, which oversees an estimated $1.53 trillion in assets, submitted its application via the Cboe BZX Exchange, marking a pivotal step in integrating Solana into mainstream financial markets.

This move follows Franklin Templeton’s recent filing for an XRP ETF, positioning the firm as one of the largest financial institutions to engage with these digital assets.

The race to launch a Solana ETF began on June 27, 2024, when VanEck made the first official filing. The growing interest from multiple institutional players has fueled market optimism, particularly as the regulatory landscape under the current U.S. Securities and Exchange Commission (SEC) administration appears increasingly receptive to cryptocurrency-based financial products.

At present, predictions on the decentralized prediction market platform Polymarket suggest a 90% probability of the SEC approving a Solana ETF. This rising institutional interest has played a crucial role in Solana’s recent price rally, with investors anticipating a surge in demand should an ETF gain regulatory approval.

Validator Support for Inflation Reduction Proposal Adds to Bullish Sentiment

Another key factor driving Solana’s price surge is the ongoing discussion surrounding SIMD-228, a proposal aimed at reducing Solana’s inflation rate by 80%.

The proposal, which has gained the support of 37.5% of validators so far, seeks to cut Solana’s staking rewards and limit the introduction of new SOL tokens into circulation. While 17.2% of validators have expressed opposition, and 1.2% have abstained from voting, the debate continues to shape market sentiment.

Should the proposal be implemented, it could significantly reduce selling pressure on SOL, as fewer newly minted tokens would enter circulation. However, some concerns remain over the potential impact on network decentralization, particularly regarding how it could influence validator incentives.

Galaxy Digital’s Strategic Investment in Solana Strengthens Market Confidence

Further boosting investor sentiment is the revelation that Galaxy Digital, the cryptocurrency investment firm led by billionaire Michael Novogratz, has made a substantial stake in Solana.

According to on-chain data, Galaxy Digital recently acquired 274,253 SOL tokens, valued at approximately $39.15 million, after withdrawing 282,500 SOL (worth $40.5 million) from Coinbase and Binance.

This investment follows Galaxy Digital’s previous participation in the FTX bankruptcy auction, where the firm acquired a significant amount of Solana tokens on March 1, 2025. The latest purchase suggests a long-term strategic commitment to Solana, reinforcing market confidence in the asset’s potential.

Will Solana Maintain Its Momentum or Face Another Decline?

Despite Solana’s impressive recovery, some analysts remain cautious about its near-term price trajectory. Several factors could pose challenges to sustained growth, leading to potential volatility in the coming weeks.

Concerns Over Large SOL Transfers from Binance

Recent transactions involving substantial SOL withdrawals from Binance have raised speculation within the cryptocurrency community.

Blockchain analytics firm Lookonchain reported that 201,755.31 SOL (worth approximately $25.01 million) was recently transferred to an unidentified wallet. While such movements often indicate strategic investments, staking activity, or security measures, they also raise concerns over potential sell-offs that could impact market stability.

Declining Network Activity and DeFi Metrics

Another potential concern for Solana’s long-term outlook is the noticeable decline in network activity.

According to cryptocurrency analyst Ali Martinez, Solana’s daily transaction volume has dropped sharply from its peak of 4,500 million in November 2024 to below 500 million in March 2025.

In addition, key DeFi (Decentralized Finance) metrics on the Solana network have weakened. The total value locked (TVL) in Solana-based DeFi protocols has fallen from $12 billion to $7 billion, while the network’s monthly transaction fees have declined from $250 million to just $89 million.

If these trends persist, they could negatively impact investor confidence and reduce Solana’s attractiveness as a blockchain ecosystem, potentially limiting its price growth.

Solana Price Forecast: Can SOL Reach $500?

Solana’s ability to reach new all-time highs will depend on several factors, including market momentum, regulatory decisions, and network adoption trends.

From a technical standpoint, Solana faces immediate resistance at the $130 level. If the price fails to break through this barrier, the cryptocurrency could experience a downturn toward $124, with major support around $120. A further decline could see SOL testing $110 or even $100, especially if network activity continues to weaken.

Conversely, a successful breakout above $130 could trigger a rally toward $150, with further gains possible if ETF optimism and institutional investment continue to drive demand.

However, the likelihood of Solana reaching $500 in 2025 remains uncertain, given the current regulatory landscape, macroeconomic conditions, and market trends.

Conclusion

Solana’s recent price surge has been driven by a combination of institutional interest, the prospect of an ETF approval, and potential supply reductions through the proposed inflation cut. However, concerns over declining network activity, large fund transfers, and DeFi shrinkage continue to weigh on investor sentiment.

While Solana’s long-term outlook remains promising, its near-term trajectory will largely depend on its ability to sustain key resistance levels and maintain network growth. The coming weeks will be crucial in determining whether Solana can continue its upward momentum or faces another market correction.

Source: CoinGape

Writer @Ellena

Ellena is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

 Check out other news and articles on Google News

Disclaimer:

The articles published on hokaNews are intended to provide up-to-date information on various topics, including cryptocurrency and technology news. The content on our site is not intended as an invitation to buy, sell, or invest in any assets. We encourage readers to conduct their own research and evaluation before making any investment or financial decisions.

hokaNews is not responsible for any losses or damages that may arise from the use of information provided on this site. Investment decisions should be based on thorough research and advice from qualified financial advisors. Information on HokaNews may change without notice, and we do not guarantee the accuracy or completeness of the content published.