Solana appeared to be entering a potential price reversal, not due to broader market sentiment but because it is trading near a historically significant level.
Meanwhile, Wall Street investors and institutional interest continued to grow despite ongoing market uncertainty, as reflected in activity surrounding United States spot Solana Exchange-Traded Funds (ETFs).
As of press time, SOL was trading at $124.50, up 1.55% over the past 24 hours, per CoinMarketCap. However, market participation remained low, as reflected in trading volume, which has declined by 40% to $3.67 billion.
This drop in trading volume suggested growing caution among traders and investors, as the price hovered near the key support level of $118.
Solana: Price action hints at a 16% rally
SOL, on the daily chart, appeared to be taking strong support at the $118 level, which has been acting as a support zone since April 2024.
Since then, SOL has tested this level more than ten times, and on each occasion, it has recorded a strong price reversal.
A similar type of reversal now appears to be on the horizon.
If SOL sustains above the key support level of $118, history may repeat itself, and the asset could see a price increase of around 16%, potentially reaching the $146 level in the coming days.
This bullish thesis would only be validated if the SOL price remains above the $118 level; otherwise, it could be invalidated.
On the daily chart, the Average Directional Index (ADX)—a technical indicator used to measure trend strength—has reached 31.26, above the key threshold of 25, indicating that SOL has a strong directional trend.
However, the asset’s price remains below the 50-day Exponential Moving Average (EMA), suggesting that SOL is still in an overall downtrend.
On-chain data signals growing investor confidence
Despite the prolonged market uncertainty, the on-chain analytics tool SoSoValue reveals that Wall Street investors and institutions continued to show strong interest and confidence in Spot Solana ETFs.
According to the data, capital has been consistently flowing into these funds since the 16th of January.
Inflows into ETFs suggest that fresh capital is entering the underlying asset, indicating growing demand for it.
Additionally, data from DeFiLlama shows that Solana’s Total Value Locked (TVL) has increased by 4.66% today, bringing the total TVL to $36.66 billion.
This rise reflects increased capital inflows and strengthening on-chain activity across the Solana ecosystem.
Traders focus on long-leveraged positions
Intraday traders appear 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 are acting as key support and resistance for the asset.
At these price points, traders have built approximately $157.18 million worth of long-leveraged positions and $66.71 million worth of short-leveraged positions, indicating that short-term market sentiment for SOL remains bullish.
Final Thoughts
- Solana has reached a level that has historically triggered price reversals, and current price action suggests the asset may repeat this pattern.
- Continuous inflows into spot Solana ETFs, along with rising TVL, indicate growing investor confidence in the asset.
