olana has seen a severe price decline recently. The heavy sell-off from the memecoin platform Pump.fun drove the price of SOL 12% lower.
The reason for Solana's recent price drop is directly connected with the action of Pump.fun. The platform sold $41 million worth of SOL tokens at around $157 per token according to data from Lookonchain. This heavy sell-off weighed on the market right away and had an immediate effect on driving down the price of Solana.
Why is SOL Suffering a Price Decline?
When whales like Pump.fun sell large amounts of tokens, panic among smaller investors inevitably sets in, coupled with a price drop. Traders usually pay close attention to whales for any indication of market direction, and in this case, it proved no different. The large-scale sales from Pump shook the market and saw SOL plummet in value.
The craze for memecoins has been another very vital factor in the recent price movements of Solana.
Renowned crypto trader and host Luke Martin noticed that the moment memecoin launches started happening, Solana's price rally just stopped. Memecoin activity was clearly mirrored by the price stagnation of SOL: investors and traders started paying more attention to these new memecoins and pulled their money from SOL, further accelerating its depreciation.
Can a Possible ETF Approval Save Solana?
It is common speculation that Solana might be the next cryptocurrency to get a spot ETF listing in the United States. Such an ETF will serve as an extremely powerful price catalyst. Bitcoin ETFs led to 75% of new investments into the token, pushing its price through the $50,000 barrier.
As such, the first approval of a Solana ETF in Brazil on August 7 sets a precedent for other jurisdictions like the U.S. An approval in the United States will be a great catalyst that could give the much-needed push to the price action of the cryptocurrency. At the time of writing, SOL is currently trading at $128, a 12.59% from the past week.
