"Buy the expectation, sell the fact" reappears? Bitwise Solana ETF strongly attracted $69 million in capital after which the SOL price fell by 5%.

Shortly after the long-awaited Bitwise Solana Staking ETF (BSOL) was launched, the price of Solana (SOL) tokens not only did not rise but instead fell nearly 5%, showcasing a typical “buy the expectation, sell the fact” scenario. Although BSOL attracted up to $69.45 million in capital inflow on its first day, traders seemed to opt for profit-taking. Additionally, ETF experts pointed out a potential structural risk: Bitwise plans to use 100% of the SOL in the fund for staking, which could exacerbate liquidity strain during large-scale redemptions.

BSOL Shines: Strong Inflows but Risks Remain

Bitwise Solana Staking ETF (BSOL) performed excellently on its launch day, attracting nearly $70 million in inflows, bringing its total assets to $289 million, which undoubtedly demonstrates Solana's strong appeal to investors.

• Strong capital attraction: A net inflow of $69.45 million on the first day is a strong proof of Solana's recognition as a digital asset investment target by institutions.
• Structural Risk: However, ETF expert Nate Geraci emphasized the potential risks of the fund. Bitwise plans to use 100% of its held SOL for staking. In the Solana network, unstaking requires a cooling-off period, which means that during large-scale redemptions, the fund may not be able to immediately access liquidity SOL, leading to liquidity tightness.
• Liquidity solution mechanism: According to Bitwise's filing documents, in response to redemptions, the trust fund may exchange SOL in the cooling-off period for high liquidity SOL through a third-party transaction, but this process may slightly reduce the fund's net asset value (NAV) during high redemption periods.

Market “Sell the Fact”: SOL Short-term Momentum Weakens

Within a few hours after the BSOL listing, the Solana price fell to around $194, down nearly 5% from its pre-launch high.

• Taking Profit: The large red candle on the one-hour chart and the surge in trading volume indicate that traders are locking in previous gains for large-scale selling.
• Technical indicators weaken: The Relative Strength Index (RSI) shows a decrease in momentum, while the On-Balance Volume (OBV) also indicates a reduction in buying activity.

Despite strong inflows into the ETF, the short-term outlook for SOL remains unclear, with market sentiment dominated by profit-taking behavior.

Leverage Establishment: Bears Still Dominate

Despite the price fall, Solana's Open Interest still increased to $4.36 billion, indicating that traders are re-establishing leveraged positions after the ETF launch.

However, the average funding rate is still negative (-0.18%), which means the number of short positions (betting on price decline) still exceeds long positions, indicating a cautious overall market sentiment, with many traders still betting on further downside.

For SOL, a shift to a positive funding rate and a continuous increase in open interest will be key signals for the return of bullish sentiment to restore the upward momentum.

Conclusion

The launch of the Bitwise Solana ETF is an important step towards the institutionalization of the Solana ecosystem, with strong capital inflows on the first day demonstrating its market appeal. However, the market's short-term reaction to this positive news has been a sell-off, coupled with potential liquidity risks from the ETF staking model, putting significant pressure on Solana's price. Investors should closely monitor changes in funding rates to determine whether market sentiment will shift from the current cautious bearish outlook to a more optimistic bullish stance.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions with caution.