Don't miss out on Ethereum and don't miss out on Solana! Wall Street giants have secretly positioned themselves, what should you do on the eve of the SOL ETF approval?

Written by: White55, Mars Finance

The black swan of the U.S. government shutdown flaps its wings again. On October 1st, the price of SOL suddenly crashed to $204, and later, leveraged retail bulls were washed out during the extreme volatility.

However, the duration of this panic sell-off was surprisingly short. At the moment when the price hit the bottom, on-chain data captured large entities quietly accumulating chips.

As of the time of writing, SOL has quickly rebounded above $209, successfully recovering the median range of the weekly opening price. Despite initial sell-offs triggered by political uncertainty, the Dow Jones Industrial Average, S&P 500, and Nasdaq all closed higher on the day, with the cryptocurrency market following suit to achieve a reversal. This resilience conveys a clear message to the market: institutional investors have not altered their long-term strategies due to short-term political noise.

Institutional Accumulation and On-Chain Signals

On-chain data provides clear evidence of institutions continuously accumulating SOL.

On September 22, the net outflow amount of SOL reached $126.8 million, marking one of the largest single-day outflows in recent weeks.

This large-scale outflow typically indicates that whales and large holders are transferring assets from exchanges to private wallets, reducing the liquid supply in the market in preparation for long-term holding.

In the past five days, spot market traders have steadily increased their holdings of SOL worth over $100 million. The largest single purchase occurred on March 28, amounting to as much as $89 million. This accumulation pattern aligns with institutional confidence in the long-term prospects of SOL. The activity level of the Solana network itself also supports this optimistic outlook.

From March 24 to mid-September, the number of transactions on the Solana network increased from 87.6 million to 92.7 million, indicating an increase in user activity. This fundamental enhancement provides positive support for price trends, suggesting that network usage growth precedes price increases.

The surge in the supply of stablecoins has provided a key signal. In the past 24 hours, the total amount of stablecoins on Solana has increased by over 300 million US dollars.

Historical data suggests that an increase in stablecoin supply often indicates a rise in demand for SOL, as traders need to purchase SOL to participate in DeFi and memecoin activities within the Solana ecosystem.

In addition, the Solana treasury established by 18 entities has a total holding of 20.921 million SOL, worth 4.37 billion USD, of which approximately 12.468 million SOL is used for staking, accounting for 59.6% of the total holdings of these entities. This behavior of long-term locking of supply provides structural support for prices.

Market Resilience Amid Political Turmoil

The risk of a government shutdown in the United States should have been a significant bearish factor for the cryptocurrency market.

According to analysis, the government shutdown could cause the U.S. economy to lose about $7 billion per week, delays in federal employee salaries could impact consumer spending, and the market's anxiety over policy uncertainty could exacerbate volatility. However, the market has shown remarkable resilience. This seemingly counterintuitive phenomenon can be explained by two key factors: the market has already priced in the expectation of a government shutdown, and cryptocurrency traders are more focused on industry-specific catalysts.

Against the backdrop of political gridlock in the United States, Bitcoin and SOL traders are choosing to focus on the numerous positive catalysts present in the cryptocurrency market. Bitcoin traders are still paying attention to the upcoming three interest rate cuts by the Federal Reserve, as well as the potential appointment of a pro-Trump Federal Reserve chairman. These macro factors could provide a more favorable environment for high-risk assets.

For SOL, traders expect that the upward momentum of Bitcoin will boost all altcoins, with their sights set on the U.S. Securities and Exchange Commission's deadline on October 10, when the fate of numerous spot SOL ETFs will be decided. This selective attention reflects the growing maturity of the cryptocurrency market, as participants learn to distinguish short-term noise from long-term trends.

Prospects of SOL ETF Approval and Regulatory Changes

On October 1st, Bloomberg's senior ETF analyst Eric Balchunas made an important prediction, stating that the probability of approval for ETFs of Litecoin, Solana, and XRP has reached 100%.

This judgment is based on the SEC's latest approved general listing standards, which invalidate the original 19b-4 application process and significantly simplify the approval process. Under the new regulations, the approval time can be reduced from 240 days to 75 days, and analysts expect that over 100 cryptocurrency ETFs may be launched within the next 12 months.

The shift in the regulatory environment marks a broader recognition of cryptocurrencies as an asset class. Issuers are preparing for the SEC to possibly approve the SOL ETF soon, with approval potentially coming as early as next week. Sources reveal that behind the scenes, issuers are getting ready for the SEC to greenlight the SOL ETF in a matter of days. Insiders associated with three different ETF issuers indicated that next week could be the time for the Solana ETF's approval. However, the U.S. government shutdown may temporarily delay this process, as approvals for listings are highly unlikely to occur during a government shutdown. But once the government reopens, the approval of the SOL ETF could advance rapidly. The significance of ETF approvals extends far beyond short-term price impacts.

Galaxy Digital acquired $1.16 billion worth of SOL, most of which was transferred to Coinbase, a move that bolstered market confidence in Solana's liquidity and institutional support. The recognition of institutional-grade blockchain paves the way for Solana's application in traditional finance.

Technical form and price target prediction

Technical analysis shows that Solana is at a critical turning point. Since May, SOL has been forming a classic “cup and handle” pattern, with the “cup” forming from May to July, the low point around $105, and the current price consolidation forming the “handle” between $175 and $195.

This bullish continuation pattern typically breaks upward, with a measured target price of approximately $282.

The cup and handle breakout pattern confirmed by the monthly chart suggests a greater long-term target. Based on the measurements of this pattern, the long-term target price for SOL could reach around $550, indicating a potential increase of over 120% in the coming quarters.

This technical narrative is mutually reinforcing with fundamental factors. The proposed Alpenglow upgrade for Solana is expected to be launched later this year, aimed at enhancing network throughput and efficiency. At the same time, the Firedancer validator has undergone extensive testing and is expected to be a major catalyst for Solana's network performance.

In terms of key price levels, traders view the $210-220 area as an important support level, which coincides with the cluster of the 20-day moving average. On the upside, the $246-252 range constitutes a major resistance level, and breaking through this area could open up upward potential towards $265-320.

Ecosystem and fundamental support

The fundamental growth of the Solana ecosystem provides solid support for its valuation.

In 2025, among the 100 million tokens issued on major mainstream networks, Solana holds an absolute advantage of 85 million. This reflects its increasingly prominent position as a leading platform for memecoins, gaming assets, and project tokens.

Solana's leading position in the DeFi space continues to expand. The total value locked (TVL) in its DeFi protocols has surpassed $12 billion, reaching an all-time high. This growth highlights Solana's increasingly important role in decentralized lending, trading, and staking platforms. Solana's network effects are creating a positive feedback loop. More users attract more developers, which in turn creates more applications, further attracting more users. Currently, Solana operates as a single global state machine, meaning that all nodes in the network have the same view of the blockchain state, which makes Solana highly resistant to fraud and censorship. Solana's speed, scalability, and low transaction costs make it an attractive choice for developers and users. Its historical proof of history consensus mechanism (PoH) allows Solana to process up to 50,000 transactions per second, with negligible fees. This technological advantage is particularly crucial in applications that require high throughput.

In the long term, Solana's price trajectory will depend on its ability to achieve mass adoption. Technical analysis showing the cup and handle pattern points to a target of $550, while the fundamental growth of the ecosystem supports this. With the launch of the Firedancer validator and the implementation of the Alpenglow upgrade, Solana is expected to address network disruption issues and further enhance its scalability.