According to CoinTelegraph, the Solana ETF saw more than $400 million in weekly inflows. ETFs play an important role in the current market cycle. The large price increases in Bitcoin (BTC) and Ethereum (ETH) were largely related to increased ETF inflows. However, market trends have changed over the past month. Despite recording large inflows into ETF vehicles, SOL’s price continues to be on a downward trajectory. Let’s discuss why.
Why is Solana underperforming despite large ETF inflows?
Most of the major crypto assets, including Solana (SOL), are traded in the red zone. According to data from CoinGlass, $1.85 billion was liquidated from the crypto market in the past 24 hours. The global cryptocurrency market capitalization fell by 4.1% during the same period to $3.48 trillion. SOL’s price is likely to be affected by market-wide corrections. Bitcoin (BTC) price has fallen to $102,000 and could even fall below $100,000.
According to CoinGecko’s SOL data, Solana’s price fell by 6.6% on the daily chart this morning. However, the asset appears to have recovered slightly, currently down 0.6% over the past 24 hours. SOL is also down 19.1% on the weekly chart, 15.3% on the 14-day chart, 32.3% month-over-month, and 1.6% since November 2024.
Solana (SOL) was one of the best performing cryptocurrencies in 2024. However, due to the recent market crash, this asset lost all the gains it made last year.
Despite a lackluster performance to date, Solana (SOL) could try to bounce back in the coming weeks. The increase in ETF inflows is a positive sign. That could mean that interest from institutional investors remains high. In addition, the Fed cut interest rates by another 25 basis points. There is also a possibility that the rally will be delayed. If Bitcoin (BTC) recovers, other assets are likely to follow suit.