Solana Price Drops 12% Following Pump.fun’s $41M SOL Token

September 05, 2024 03:32 PM AEST | By Team Kalkine Media

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Solana Price Drops 12% Following Pump.fun’s $41M SOL Token — Image source: shutterstock

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The Solana (SOL) token has experienced a notable decline in value recently, with a drop of over 12% during the week leading up to September 4. The token was trading at approximately $128, reflecting a 3.8% decrease on the daily chart according to Cointelegraph data. This decline follows a significant sell-off by Pump.fun, a memecoin launch platform, which recently liquidated $1.38 million worth of SOL. Since the start of these transactions, Pump.fun has sold a total of $41.64 million in SOL, averaging $157.50 per coin.

Large holders, often referred to as whales, can substantially influence cryptocurrency prices due to the significant volume of their trades. Their selling patterns are closely monitored by traders as they can provide insights into short-term price movements.

The recent downturn in {Solana} (SOL) price may also be linked to the ongoing memecoin trend on the Solana network. The influx of meme tokens, launched via platforms like Pump.fun, has contributed to a stagnation in Solana's price action. Additionally, Solana's price is closely correlated with Bitcoin's performance. Over the past three months, Bitcoin’s price fell by nearly 18%, while Solana's price declined by approximately 22%, as reported by Bitstamp.

In terms of potential market catalysts, Solana may be poised to benefit from a spot exchange-traded fund (ETF) listing in the United States. Brazil’s approval of the first Solana ETF on August 7 sets a precedent for future developments in other global markets. Although a US-based Solana ETF remains speculative, it could act as a significant price catalyst if approved.

Alejo Pinto, former IBM blockchain growth lead and founder of the Solana layer-2 network Lumio, has highlighted the ETF's potential impact. Similarly, Manthan Dave, co-founder of Palisade, a Ripple-backed digital asset custody platform, suggests that an ETF could materialize by the end of 2024. Historical data shows that spot ETFs have notably bolstered the price of underlying cryptocurrencies, as observed with Bitcoin, where ETFs accounted for a substantial portion of new investments when it surpassed previous price thresholds.

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