Solana Price Drops 12% as Pump.fun Sells $41M in SOL Tokens
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The price of Solana (SOL) has experienced a sharp decline, falling 12% over the past week, largely due to significant selling activity from memecoin platform Pump.fun. This comes at a time when Solana could potentially be the next major cryptocurrency to receive a spot ETF listing, a development that could act as a price catalyst.
SOL Price Falls Amid Pump.fun Sales
As of 11:06 am UTC on September 4, Solana's price had dropped to $128, a 12% decrease over the week and a 3.8% decline on the daily chart, according to data from Cointelegraph. The decline followed Pump.funâs sale of another $1.38 million worth of SOL tokens, as reported by blockchain tracker Lookonchain in a Sept. 3 post on X (formerly Twitter).
This brings Pump.funâs total sales to $41.64 million worth of SOL at an average price of $157.50 per coin. Such large-scale sales by whalesâentities holding significant amounts of cryptocurrencyâcan influence market prices, as traders often take their cues from these selling patterns.
Are Memecoins Contributing to Solana's Price Pressure?
The recent memecoin craze on the Solana network may be putting downward pressure on the tokenâs price. According to crypto trader and podcast host Luke Martin, Solana's price rally stalled when users began launching large numbers of meme tokens on Pump.fun. In a Sept. 4 X post, Martin noted that Solanaâs price halted its upward trajectory around the time when memecoin launches surged.
Solanaâs price has also been closely linked to Bitcoinâs performance. Over the past three months, Bitcoin's price has fallen by nearly 18%, while Solana has dropped 22%, according to data from Bitstamp.
Could a Solana ETF Provide a Price Boost?
Despite recent price declines, Solana could see a turnaround if a spot exchange-traded fund (ETF) for the token is approved. Brazilâs first Solana ETF was greenlit on August 7, paving the way for other jurisdictions, including the U.S., to potentially follow suit.
While the approval of a Solana ETF in the U.S. remains uncertain, it could act as a strong price driver if it happens, says Alejo Pinto, founder of Solana Layer-2 network Lumio. He told Cointelegraph that because a U.S. ETF approval is currently seen as unlikely, any positive decision would likely lead to a price increase.
Manthan Dave, co-founder of Ripple-backed digital asset custody platform Palisade, echoed this sentiment, stating that a Solana ETF could be approved by the end of 2024, possibly as early as this year.
Historically, ETFs have had a significant impact on the price of underlying assets. For example, spot ETFs accounted for 75% of new Bitcoin investments by mid-February 2021, helping the cryptocurrency break the $50,000 mark.
With the potential for a Solana ETF on the horizon, investors are keeping a close eye on market developments as they navigate the memecoin surge and broader crypto market trends.
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