The price of Solana (SOL) has been on a remarkable upward trajectory, surging by 44% since the beginning of the week. As of now, SOL/USD is trading at around $59.5, marking a 5% increase for the day. However, it is important to note that the cryptocurrency has retraced around 7% from earlier session highs of $64. This surge in Solana’s price follows a significant breakout above the 2022 summer highs of $47.50. Furthermore, the optimism surrounding spot Bitcoin ETFs and now spot Ethereum ETFs has added fuel to the fire.
Contrary to merely following the broader market trend, Solana has emerged as the best performer among the top 20 cryptocurrencies by market capitalization. With a growth of nearly 50% in the last 30 days, Solana (SOL) is attracting significant attention from investors. This growing sentiment is further supported by various Solana-specific indicators, which suggest a surge in interest from institutions.
On-chain metrics reveal a substantial increase in activity on the Solana network. Data from The Block indicates a rising number of active addresses on the Solana network, reaching an average of around 270,000 over the past seven days. This significant rise comes after a period of all-time lows dipping below 200,000 active addresses in September. Additionally, the total value of crypto locked in smart contracts on the Solana blockchain, also known as Solana’s TVL, has surged to over $2.1 billion. This surge is the highest level since October 2022, prior to the collapse of Sam Bankman-Fried’s FTX/Alameda empire.
Rising Interest from Institutional Investors
Sophisticated and institutional investors play a crucial role in determining market sentiment. Coinglass reveals that the Open Interest funding rate for opening leveraged futures positions has entered positive territory, indicating a high level of demand from bullish traders. Notably, the Open Interest for Solana futures contracts has recently reached its highest level since April 2022, surpassing $770 million. This surge primarily suggests the return of institutional investors to the market. CoinShares, a digital asset fund manager, further supports this notion, as Solana investment products witnessed a significant inflow of $10.8 million in the week ending on November 3, 2023, bringing the yearly inflows to over $100 million.
Despite the consistent sales of 250,000-700,000 SOL tokens every day by FTX over the past two weeks, the Solana market has remained resilient. These sales appear to have been absorbed effectively, indicating strong demand and a potential depletion of FTX’s unlocked tokens within a week. This absorption of tokens from the seller has resulted in a pump of nearly 40% in SOL since the tweet by @Bluntz_Capital. With the key resistance level of $47.50 broken, a test of the early 2022 lows around $75 seems inevitable. Additionally, this could pave the way for further gains of approximately 30% for Solana.
Price Predictions and Future Outlook
Given the current bullish momentum and the anticipated approval of spot Bitcoin ETFs, the broader market is expected to experience a continued rally into 2024. Alongside this, Solana’s strong appeal to institutional investors and the ongoing recovery in on-chain activity positions SOL as a standout performer in the coming quarters. Despite the impressive growth of over 7x compared to its 2022 lows of $8, Solana still remains 77% lower than its 2021 highs of $260. This suggests that the bull market is far from over, with a potentially achievable target of $100 for SOL in the near future.
Solana’s price rally showcases its promising potential as a top cryptocurrency. The significant surge in price, coupled with growing interest from institutions and increasing on-chain activity, positions Solana as a strong performer in the crypto market. With a favorable market environment, including the potential approval of spot Bitcoin ETFs and a continued rally in the broader market, Solana is poised to achieve new milestones and potentially reach a price target of $100.
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