The price of Solana (SOL), the cryptocurrency that powers the high-performance, smart-contract-enabled Solana layer 1 blockchain protocol, continues to melt higher on Saturday, taking its rally since the start of the week 44% as the price tests $60.
SOL/USD was last changing hands around $59.5, up around 5% on the day, though the cryptocurrency has pulled back around 7% from earlier session highs in the $64 area.
Solana’s price pump comes following its decisive break to the north of summer 2022 highs in the $47.50 area earlier in the week, and as optimism about spot Bitcoin ETFs and now also spot Ethereum ETFs reaches a boiling port.
But Solana isn’t just following the broader market trend.
Up nearly 50% in 30 days the last days as per CoinMarketCap, Solana (SOL) is leading the crypto rally as the best performer in the top 20 by market capitalization.
Various Solana-specific indicators suggest sentiment is drastically ramping up and that institutions are taking interest.
Solana Market Heating Up, Various Indicators Suggest
On-chain metrics suggest that activity on the Solana network is heating up.
As per data presented by The Block, the number of active addresses on the Solana network has been trending higher in recent weeks, last reaching around 270,000 on average over the past seven days after hitting all-time lows under 200,000 in September.
Meanwhile, according to DeFi Llama, the total dollar-denominated value of crypto locked in smart contracts on the Solana blockchain, or Solana’s TVL, has surged to over $2.1 billion, its highest level since October 2022, prior to the collapse of Sam Bankman-Fried’s FTX/Alameda empire, where Alameda had acted as a key provider of liquidity to the network.
Elsewhere, various indicators give an insight into the sentiment of institutional/more sophisticated investors show that the market is heating up.
As per Coinglass, the Open Interest funding rate of opening leveraged futures positions has swung into decisively positive territory and is at its highest level since at least May.
That suggests traders opening long positions are paying funding to those with short positions, suggesting disproportionate demand from the bulls.
Open interest, defined as the outstanding value of currently open Solana futures contracts, also recently jumped to a its highest level since April 2022 above $770 million.
Leveraged futures trading strategies tend to be utilized more by sophisticated, institutional investors rather than retail investors, so rising open interest suggests institutional investors are returning to the market.
That’s in fitting with data released by digital asset fund manager CoinShares, which revealed that Solana investment products enjoyed $10.8 million in inflows in the week ending on the 3rd of November, taking yearly inflows to over $100 million.
Price Prediction – Where Next for Solana (SOL)?
Inflows from institutions has helped the Solana market shrug off sales from FTX in the region of 250,000-700,000 SOL tokens every day over the last 2 weeks, X user @Bluntz_Capital noted earlier in the week.
“So far (these tokens have) been getting absorbed like a champ and at current rate their (FTX’s) unlocked tokens should be depleted within a week,” he added.
“Once this seller is gone I can only imagine how hard its gonna pump”.
FTX has been selling between 250k-700k $SOL every day for the last 2 weeks while price has either been going up or sideways.
so far its been getting absorbed like a champ and at current rate their unlocked tokens should be depleted within a week.
once this seller is gone i can… pic.twitter.com/AtnTqz3uxG
— Bluntz (@Bluntz_Capital) November 9, 2023
Since @Bluntz_Capital’s tweet, SOL has pumped nearly 40%.
With key resistance in the $47.50 area broken, a test of the early 2022 lows around $75 seems only a question of when, not if.
That could mean further quick gains in the region of 30% for Solana.
Price predictions thus look set to remain bullish.
Is SOL $100 Incoming?
It certainly seems as though the bulls are in control of Solana.
Assuming spot Bitcoin ETFs soon get approval, the broader market is expected to continue to rally into 2024, and assuming that Solana continues to attract significant interest from institutions and that on-chain activity continues recovering, SOL is positioned to be a strong performer in the coming quarters.
Though the cryptocurrency is up more than 7x versus its 2022 lows around $8, it remains 77% lower versus its 2021 highs around $260.
That suggests this bull market still has a long way to run.
A $100 SOL price should be easily attainable.