The crypto market is all abuzz with excitement! Investors are looking forward to the possible approval of Ethereum (ETH) and Solana (SOL) ETFs. Whether this development will lead us into an “Altcoin Summer” remains to be seen, if it does, it would introduce big changes and opportunities for investors. Lee Chia Jian, a seasoned observer of the crypto space, explores the prospects of these ETF approvals, their potential impact on prices, and strategies to navigate the evolving landscape.

Solana ETF Approval: A Likely Scenario

Polymarket, a decentralized prediction market, indicates that the odds of the U.S. Securities and Exchange Commission approving a Solana ETF have jumped. As of June 1, these odds are an amazing 83%. Unsurprisingly, the market is getting increasingly bullish. This optimism comes on the heels of growing odds that a Solana ETF will be granted regulatory approval. Solana ETFs likely won’t see approval until 2025, experts predict. Depending on how the news is interpreted, this approval could pump Solana’s price immensely.

Several fund issuers, including prominent names like Grayscale and Bitwise, have already filed with the SEC to launch ETFs that track a bundle of cryptocurrencies. These filings are an attempt to provide investors broad exposure to the crypto market. This decision increases the euphoria surrounding the long-expected next altcoin season. Bloomberg’s analysts are betting on a 90% chance that these ETF applications will be approved. We may get a ruling as soon as July 2. The approval of an ETH and SOL ETF would incite a fiercer institutional demand for these assets. All this new demand would undoubtedly lead to an exorbitant price spike.

Market experts believe that if approved Solana ETFs would create a significant new wave of institutional investment on Solana’s blockchain. This would guarantee Solana’s status as the premier blockchain asset. As a result, analysts have kept a bullish Solana price prediction of $500 for 2025, possibly fueled by ETF approval. Historical data supports this optimism: Bitcoin and Ethereum spot ETFs, approved in 2021 and 2023, respectively, drew billions in inflows, boosting their prices by 15-20% in the first month post-approval.

Ethereum ETF: A Different Story

Though the outlook for Solana ETFs is encouraging, the story is a bit different when it comes to Ethereum. Even with continued inflows over several trading days, Ethereum ETFs have so far failed to move the market dramatically. Glassnode reports that Ethereum ETFs now account for just over 1.5% of trading volume in spot markets. This data represents all market activity through 2025 so far. As the most obvious next step, there has been tremendous interest in Ethereum ETFs. So far they’ve failed to ignite anything close to the same level of market excitement witnessed with Bitcoin ETFs.

Decisions on Ethereum ETFs, staking ETFs, and brand new spot ETFs for Solana too could be approved as early as July 2. June will be an important month for both Ethereum and Solana. Now, multiple companies have filed amended S-1 registration statements to list spot Solana exchange-traded funds, suggesting that the SEC is getting closer to greenlighting these products. July looks to be an exciting month for both Ethereum and Solana, as July is the month ETFs may become approved and launched. While narratives can be fickle, a powerful altcoin rally looks to have timing toward the months of September-December, possibly helped along by ETF approvals launching.

Navigating the Altcoin Summer: Strategies and Risks

To ride out the incoming “Altcoin Summer” investors can focus on a variety of technical analysis strategies. These include:

Technical Analysis Tools

  • Trend Analysis: Identify the overall trend of the altcoin market using indicators like Moving Averages (MA) and Relative Strength Index (RSI). A bullish trend is indicated by a rising MA and RSI above 50.
  • Support and Resistance Levels: Determine key support and resistance levels for specific altcoins using chart patterns, such as triangles, wedges, and channels. These levels can help investors make informed decisions about entry and exit points.
  • Momentum Indicators: Utilize momentum indicators like Stochastic Oscillator, Bollinger Bands, and MACD (Moving Average Convergence Divergence) to gauge the strength of price movements and potential reversals.
  • Volume Analysis: Analyze trading volume to confirm trends and identify potential breakouts. Increasing volume with rising prices can indicate a strong uptrend.
  • Chart Patterns: Recognize chart patterns like Head and Shoulders, Inverse Head and Shoulders, and triangles, which can signal trend reversals or continuations.

Investors need to understand and consider the risks that come with new opportunities as well. Beyond the implied risks of all altcoins, ETFs that focus on these altcoins—like SOL—generally offer significantly lower liquidity compared to Bitcoin ETFs. This may mean larger spreads and increased bid-ask prices. It is possible that the SEC could deny a number of ETF applications. Even if they do approve them, there may be limitations on staking services that dampen the attractiveness of ETH and SOL ETFs.

Lee Chia Jian, co-founder and CEO of DeFiance Capital, discusses how smart planning and nimble thinking got them through the chaos of the crypto winter. As ETH and SOL ETFs likely pending approval, investors must be aware of relevant news. They must do their own diligent homework and be prepared to pivot their tactics as the new market changes emerge. In so doing, they’ll be able to leverage the transformation of “Altcoin Summer” into opportunity, not disruption. In turn, they are able to lower potential risks.