Solana seems to be on the verge of a potential price reversal, not influenced by overall market sentiment but rather due to its proximity to a historically significant level.
Meanwhile, interest from Wall Street investors and institutions continues to grow despite market uncertainty, particularly evident in the activity surrounding United States spot Solana Exchange-Traded Funds (ETFs).
At the time of writing, SOL was trading at $124.50, showing a 1.55% increase over the last 24 hours, according to CoinMarketCap. However, trading volume remains low, with a 40% decline to $3.67 billion.
The decrease in trading volume indicates a sense of caution among traders and investors, especially as the price hovers around the key support level of $118.
Solana: Potential 16% Price Rally
On the daily chart, SOL appears to be finding strong support at the $118 level, which has served as a support zone since April 2024.
Historically, SOL has tested this level more than ten times, each time resulting in a significant price reversal.
Source: TradingView
A similar reversal pattern seems to be emerging now.
If SOL can maintain its position above the key support level of $118, there is a possibility of a 16% price increase, potentially reaching $146 in the near future.
Source: TradingView
This bullish scenario would only be confirmed if the SOL price stays above $118; otherwise, it could be invalidated.
Looking at the daily chart, the Average Directional Index (ADX) has reached 31.26, above the critical threshold of 25, indicating a strong directional trend for SOL.
However, the asset’s price remains below the 50-day Exponential Moving Average (EMA), suggesting an overall downtrend for SOL.
Growing Investor Confidence from On-chain Data
Despite ongoing market uncertainty, on-chain analytics from SoSoValue indicate sustained interest and confidence from Wall Street investors and institutions in Spot Solana ETFs.
Data shows a consistent inflow of capital into these funds since January 16th.
Source: SoSoValue
Inflows into ETFs indicate fresh capital entering the underlying asset, signaling a growing demand.
Additionally, DeFiLlama data reveals a 4.66% increase in Solana’s Total Value Locked (TVL) today, reaching $36.66 billion, reflecting increased capital inflows and on-chain activity in the Solana ecosystem.
Focus on Long-leveraged Positions by Traders
Intraday traders seem to be aligning with the bullish price action. According to data from the derivatives analytics tool CoinGlass, traders are currently overleveraged at $121.3 on the downside and $125.7 on the upside.
These levels serve as key support and resistance for the asset.
At these price points, traders have built around $157.18 million worth of long-leveraged positions and $66.71 million worth of short-leveraged positions, indicating a bullish short-term market sentiment for SOL.
Source: CoinGlass
Final Thoughts
- Solana is at a level historically associated with price reversals, and the current price action suggests a potential repeat of this pattern.
- Continued inflows into spot Solana ETFs and the rising TVL indicate growing investor confidence in the asset.