Solana, one of the leading smart contract blockchain networks, is experiencing a significant decline in daily transactions, raising questions about its price trajectory ahead of the much-anticipated exchange-traded fund (ETF) approval. According to data from CryptoQuant, Solana’s daily transactions have dropped to roughly 64 million, a nearly 50% decline from their July peak of 125 million. While many investors were hoping for a surge in activity leading up to the ETF deadline, analysts suggest that Solana’s price action may remain muted and largely follow the movements of Bitcoin.

Experts point to multiple factors driving this downturn in activity. Shivam Thakral, CEO of the Indian crypto exchange BuyUcoin, attributes the decline to a combination of capital rotation to rival networks and friction within Solana’s validators and user experience. He explained to Decrypt that subsiding retail activity, along with growing investor interest in competing chains such as BNB Chain, has contributed to the normalization of Solana’s transaction volume. “The drop is part normalization, part competitive pressure, and part sentiment shift,” Thakral noted, indicating that this is not necessarily a sign of fundamental weakness but rather a natural market adjustment.

Despite the decline in daily transactions, the SEC’s pending decision on spot Solana ETFs continues to generate attention. The regulatory agency’s final deadline for ruling on applications from issuers including VanEck, 21Shares, Bitwise, and Franklin falls on Friday, according to Bloomberg Intelligence. The anticipation surrounding these ETFs has been a key focus for investors, though analysts caution that Solana’s price may not experience a standalone surge even if the approval goes through. ETF analyst Eric Balchunas has emphasized that the market has largely priced in the expected approval, noting that the “generic listing standards” greenlighted by the SEC in September have diminished the relevance of individual 19b-4 filings.

The current market environment suggests that Solana is unlikely to move independently of broader crypto trends. Thakral pointed out that Solana’s price action is “far more likely to tag along with Bitcoin’s direction.” In other words, while the ETF approval could provide a short-term boost, sustained bullish momentum would likely require both broad ETF-driven inflows and a Solana-specific catalyst. Without these factors, traders and investors may see muted price movements even as institutional products begin offering Solana exposure.

JPMorgan analysts also shared a cautious outlook on Solana ETFs in a recent report. While U.S. exchange-traded funds are expected to provide investors with regulated exposure to Solana, JPMorgan noted that these products may struggle to attract record inflows similar to Bitcoin or Ethereum funds. Analysts cited investor fatigue, a preference for Ethereum products, and overall market rotation away from altcoins as factors limiting potential inflows into Solana ETFs. This tempered outlook reinforces the notion that Solana’s price trajectory will likely remain closely tied to broader market trends rather than experiencing an isolated rally.

One factor that could influence investor behavior is the fee structure of ETF products. Bitwise recently amended its filing to include a low fee of 0.20%, which Balchunas described as a positive signal for inflow potential. Historically, ETFs with lower fees tend to attract more investor interest, and this could provide Solana with some support once these products launch. However, even with favorable fees, analysts warn that the absence of a major, Solana-specific catalyst could prevent the network from achieving a significant breakout.

The drop in daily transactions also points to changes in network usage and user behavior. With activity down by nearly 50% since July, capital appears to be rotating toward other L1 networks that have been gaining traction. This rotation may also reflect broader investor caution, as traders reassess positions ahead of ETF approvals. While Solana’s network remains robust, with high throughput and a growing ecosystem of decentralized applications, the temporary slowdown in transactions signals that market participants are exercising prudence and waiting for clearer directional cues.

From a technical standpoint, Solana’s price may remain range-bound until either Bitcoin provides a strong directional signal or ETF-driven inflows materialize. Historical patterns show that altcoins often follow Bitcoin’s lead in the short term, especially during periods of regulatory or macro uncertainty. This suggests that investors should monitor not only Solana-specific developments but also broader market movements to gauge the likely trajectory of SOL.

In conclusion, while the upcoming Solana ETF approval is a highly anticipated event, its immediate impact on SOL price may be limited due to declining daily transactions and broader market dynamics. Analysts point to a combination of retail normalization, capital rotation, and competitive pressures as primary drivers behind the slowdown in network activity. Investors should temper expectations and consider that Solana’s short-term price action is likely to mirror Bitcoin’s trend unless a unique catalyst emerges. With ETF inflows, low-fee products, and ongoing ecosystem development, Solana remains positioned for potential long-term growth, but caution and strategic timing will be key for traders navigating the current landscape.