Solana’s latest announcement comes at a key moment for the market.
In its official announcement, Solana noted that Pando Finance will list its Solana ETF on the Hong Kong Stock Exchange on the 13th of October. With an estimated expense ratio of 1.6% annually, the ETF will hold SOL through HashKey, with no staking, leverage or dividend payouts, per the key facts statement. This will make it Hong Kong’s second Solana ETF, after the ChinaAMC Solana ETF.
Viewing from a broad perspective, the timing is when institutional flows are becoming weak. Despite the strong start to the fourth quarter, SOL ETFs turned bearish again, with more than $30 million in outflows this month. In this context, Hong Kong’s new listing could attract new inflows and help curb this downtrend.
On the technical side too, the announcement comes at a key moment.
SOL is down over 5% this month, not able to move above $120 before pulling back toward the $95 support zone. Positioning also suggests that bears are taking control, with Solana long/short ratio slipping back into negative territory, suggesting growing bearish sentiment among traders. However, SOL’s 5% drop is still relatively small compared to other large-cap cryptos, suggesting bulls may still be holding their ground.
Naturally, investors are now looking at the listing of Solana’s ETF in Hong Kong. Spot SOL ETFs worldwide have a combined net inflow of $1.9 billion in net assets, with $1.61 billion. Despite the recent outflows, institutional demand remains strong. The question now is whether the newest listing in Hong Kong can set Solana [SOL] up for a bear trap.
Solana’s ETF launch tests the bears
Solana’s Hong Kong ETF launch comes amid bearish positioning and rising liquidity.
According to SolanaFloor, Circle has minted $3.5 billion in USDC on Solana over the past seven days, keeping the network’s stablecoin market cap above $16 billion. This stands out as stablecoin market cap on other blockchains have fallen below critical levels, suggesting that Solana is continuing to attract liquidity.
Meanwhile, one analyst pointed out that much of the downside liquidity has already been washed out, with SOL closing the week down over 8%. As the chart below shows, over $65 million in long liquidations have occurred on the 8th of October, the biggest single-day flush since early June. With many long positions unwound, focus is now on short-liquidity clusters that could spark a potential short squeeze.
That brings the focus back to Solana’s upcoming Hong Kong ETF launch.
With institutional interest being supported, SOL demonstrating relative strength, long positions being unwound, bulls making a comeback, the launch can ignite a short squeeze and rally, and most importantly, can contribute to Solana’s rising ETF trend.
Considering that Q4 started bullishly, a breakout above $125 could become the start of a larger SOL rally.
Final Summary
Hong Kong’s Solana ETF could bring fresh money into SOL.
With liquidity building, SOL could break above $125 and start a bigger rally.